More On Signals & Limits #
Actionable parameters are drawn on the chart before price arrives there. Untouched levels are deleted. Touched levels remain. A signal’s arrow is deleted if not pierced by the minimum 3-4 tick qualification.
Consistent Features Among Signals #
– Signals are placed on the chart before price gets there.
– I announce a signal’s level as I’m drawing it.
– I describe its basis in my methodology (if not just adjusting an existing signal).
– I discuss price action as it begins testing a signal for the first time.
– Signals forever stay on the chart if at least touched.
– The drawn signal speaks for itself as being the inflection point.
– Several different strategies are available to execute on a signal.
Active Traders #
1. The inflection point’s buy signal is probed. Counter-trend noise (detour) is contained to its first 3 minutes, while awaiting reinforcements to arrive above the first 3-minute high’s probe.
[ACTION: Buy-stop beyond the inflection point, or after monitoring the fluctuation that might develop around it.]
2. The probe is high enough to calculate a pullback (reaction) limit. Counter-trend sponsorship uses all available 3 minutes but probes no deeper before resuming the signal’s direction.
[ACTION: Consider scaling into an expanded position when the pullback’s 3-minute extreme is obvious, taking advantage of an attractive risk:reward.]
3. A target is labeled in this instance, and trending approaches it.
[ACTION: Reassess the risk contained by a stop, compared to the shrinking reward as the target nears.]
4. Another pullback limit is tested, already reversing back up before using all of its allowable 3 consecutive minutes.
[ACTION: Another opportunity to scale in more exposure. Until extending to enough of a higher high to calculate a new pullback limit, the pullback limit would “reset” to allow a new 3-minute test.]
5. Probing under the pullback limit test’s original 3-minute low violates it, and ends that sponsorship’s trending.
[ACTION: Stops should have been adjusted to the pullback limit test’s low, or with a 1-2 point buffer below it.]
6. Deteriorating RSI and MACD suggested at least tightening an existing long position’s trailing stop, if not also considering a new short position’s stop-entry.
[ACTION: Until either is triggered, the deteriorating technicals are a call for reinforcements to the existing position. Reinforcements often arrive.]
