whipcrack wrote:I like the generics of it because it reacts to, & reflects, the current volatility of the market. You’re essentially looking to piggy back a determined momentum shift & ride it for as long as it lasts by tracking it closely on the faster moving chart timeframe.
Exactly, that’s all you’re seeking to do.
Price will either accelerate & get carried along on a strong tide of momentum, or it will fake you, fade and/or quickly evaporate. There really isn’t too much to think about when applying this type of strategy play.
If the area & chart reference allows you to plot positive risk, whilst placing the probability factor in your favor, then great.
If it fails to kick on, then you have a very valid reason to scratch it, sit back & wait for a more opportunistic entry.
Am I correct in thinking that you’re only looking for very aggressive momentum shifts? You wouldn’t for instance take a trade on that moves gradually from A to B, pulled back & then followed through meekly at the previous momentum high?
Obviously, a strong, aggressive push simply confirms adequate & acceptable participation (one-way volumes). That would always be preferable to a weak & insipid assault through a prior momentum high. But until the price action works it’s way up or down the chart, you’re not really going to know if it was indeed a strong or weak assault.
That’s why it’s quite important (as of course it is with every type of trade trigger) to stack the odds in your corner as much as possible by factoring in certain elements that satisfies your criteria for a high probability trade.
If part of that equation includes only trading in the direction of the 60 minute, or 240 minute or daily trend & only triggering trades via say a 5 min timeframe that allows a clear, identifiable technically based risk stop, then so be it.
It’s important that whatever trade set up & trigger combination you utilize, it conforms to something you can own & that you trust completely.