Question on absolute basics of method

I was discussing general trading ideas with someone that is just starting his journey. It often helps to tie up concepts with a concise summary.

It comes down to: 1hr flow in line with D view. Essentially thats it.


If it appears that D view is not working then counter trend rules come into play: proven support and resistance levels and W pivots, when price has proven over a period of several hours that it does not want to continue in trend (specifically not 1 x 1hr candle).  

We really want to see good 1hr flow.

Some examples to expand the idea. Taking my early morning view of 21 June as a basis for discussion. Going into the day I made this general comment:

It does not seem that there were strong Asian buyers for EUR and GU this morning. Makes me think there is chance of move down continuing. We'll see what candles give us.

The general view for EUR was:
EUR - D closed negative with a decent lower wick, RSI has crossed below 50 level. 4hr RSI crossed up but could easily flip over. We are moving up to a support/resistance level around W M2 1.3260 and if we are headed lower that would be a level to watch out for. No bias can go either way.

Going into LO on 4hr we had a shooting star. On 1hr the arrows up show the sequence of higher lows and higher highs i.e. short term uptrend. The x shows where the flow shows first change with a shooting star that makes a lower high, the arrows down show where this one hour flow changed. So if your D view was down you could be looking to enter after the 1hr shooting star marked X as the immediate flow is back in line with the bigger picture. There is another 1hr lower high going into the US session.

So now D down, 4hr shooting star before London open and a 2nd going into US open, 1hr flow confirming move down.

The general view for GU was:
GU -  D closed a hammer, 4hr has signaled up with RSI cross. No bias can go either way.

Long time readers here will know my view is that any potential reversal candle that cannot cross its tight 8lwma has to be treated with caution. The D hammer in itself is a good candle but it was not close to a cross so we could go either way. The 4hr had a series of upper wicks and after London open 1hr had a 3 bar reversal marked x.

The general EURAUD view was:

EURAUD - D positive, 4hr has stalled RSI has crossed lower. A 1hr negative close here would give a lower high sell signal. Counter trend as there is nothing yet for me to believe that this is anything other than a dip in uptrend.

For this discussion I'd like to ignore the rejection of W R2 and the 4hr sell signal when RSI crossed lower. If we are looking for 1hr buy signals in line with D and we want the flow to confirm. It is extremely difficult to find an entry when the flow as shown by the down arrows is so clearly down. We will be waiting for 1hr flow to change up before buying.

 

So in summary we are looking to trade in line with 1hr flow.