We look to follow the daily candles as much as possible. Trying to keep things as simple as possible we:
1) try and identify support and resistance levels
2) look for positive/negative closes to follow through the next day (as we believe this will hold true approx 70% of the time)
3) watch for divergence
4) Look for D chart higher lows/lower highs, double tops/bottoms, engulfing candles, hammers/shooting stars, morning/evening star patterns
5) rsi crossing its moving average or crossing the 50 line
If we are confident that a confluence of the above exists then the next day we will look to trade in 1 direction only. This keeps us out of some head fake moves typically around London open and the US open (weak counter trend 1hr candles in and around US open just as big a fake move as LO).
1) try and identify support and resistance levels
2) look for positive/negative closes to follow through the next day (as we believe this will hold true approx 70% of the time)
3) watch for divergence
4) Look for D chart higher lows/lower highs, double tops/bottoms, engulfing candles, hammers/shooting stars, morning/evening star patterns
5) rsi crossing its moving average or crossing the 50 line
If we are confident that a confluence of the above exists then the next day we will look to trade in 1 direction only. This keeps us out of some head fake moves typically around London open and the US open (weak counter trend 1hr candles in and around US open just as big a fake move as LO).
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