Replies to post #120574 on Simple's Green Room

[pennies2007]

Same way I did this morning when I went long EA the first time. During bullish trends, price will always pull back as profit takers step in. Then price will begin to move back up. Just wait for the TDI to break out along with price and then jump back in as the TDI retests it's trendline along with price action retesting it's trendline.

Example here on the EA 5 minute chart from the trade I took this morning...the first TDI breakout and retest gave us the ability to get in before the price action trendline was ever broken topside. The second TDI breakout and retest happened at exactly the same time the price action was testing it's top trendline as support before the big pop came along.

I still keep an eye on the larger time frames when looking for these setups. Until I start seeing negative divergence on the hourly, for example, I can continue to use the 5 and 15 minute charts to look for these types of continuation plays.

[pennies2007]

Ok, now here we can see where the TDI is beginning to break out above it's bearish trendline. The price action is right at the trendline so expectations are that price will break above it's trendline shortly and then come back down to test it for the ideal long entry as the TDI retests it's trendline.

Simple, yes? :-)

[pennies2007]

Here's more food for thought. During retraces, a consolidation zone will appear...call it a CZ zone for short. During my time in the Skype room, I ran across a trader who uses these things almost exclusively to make money day in and day out.

What he waits for is a break above or below a consolidation zone, either for a trend continuation play or a reversal play depending on the setup.

This is really nothing more than simple support and resistance. Price action floundered around inside that CZ box early this morning. Price finally broke out well above the CZ box and has now come back down to test it as support instead of resistance.

Since we now have a confirmed TDI breakout and a price action breakout all at the same time, we can surmise that EA will move higher from these levels.

So basically you have to watch and process all sorts of information when trading. Watching just the indicator or just a moving average or just the price action won't do it...you have to be able to read the whole package like a book instead of just reading a single page out of context. If there is a holy grail, that's it.

Same 5 minute chart...