In this post, I like to work on “when a trade is a must jump or to be caution”.
Most important I like to highlight the importance of sticking to key concept of Tflow® in your trading.
One thing that I remind myself everyday: don’t lose sight of big picture planning, don’t be overly eager to click the button, any moment that I lose guard, the market will always punish me
Big Picture Planning
Wash and Rinse of a trend line, with weekly close confirmed
A big d1 1234, with chart pattern at point 4, however, pt 2 is not broken yet
This trade is a caution as price seems supported by Feb 2013 high. As of week close, price is at Feb 2013 high. Even there seems to be a potential big move, I will only want to trade when there is a clear break by price firmly close below Feb 2013 high
Inspection of H4 shows price has a near support shown by marked A; I will be more convince of the power of bear if this support is broken by price showing a bearish expansion below it
Review of a student trade
Student shorted on the circled 1234. This is a bad trade, because it is a smallish 1234 (or rather, I won’t even call it 1234). Because of higher timeframe analysis concluding that bears are not strong yet for this trade, it is always prudent to make sure that 1234 is convincing when trade during a retracement near to resistance. One shouldn’t just jump or desperate to trade price retrace to resistance. The need for 1234 to meet all stated Tflow® rules is a MUST. In fact, I think that the 1234 marked in blue boxes is a good one, because pt 2 is clear that’s a box high, as well as the 1234 pattern is a 2 day pattern, while the 1234 pattern taken by student is only half a day.
Currently another 1234 forms. I’m not sure even if this is a 1234 that I’m enthusiastic to trade. Well, pt 2 is not a box high and this is only a 1 day pattern. However, if price can close below the suspected 13TL (assuming that it could be a 1234), then it will also have a close below the red support line which I mentioned (Feb 2013 high). Then I might be more enthusiastic bearing in mind that a close below the red line could also make the D1 1234 to be true. Whatever it is, I will take it slowly and INSIST that price must happen exactly what I wanted, otherwise, NO TRADE. Whatever it is, it has to be a H4 close (minimum) ideally a D1 close below Feb 2013 high. Why waste my bullet for a trade that is not even high probability?
That’s the reason why I made such a tweet
— TerraSeeds FX Tflow® (@terraseeds) April 25, 2014