The best way to stay in tune with the market is to trade the Imp-Corr structure until it breaks – all the while giving myself the best chance of success through using retest entries. This is exactly what happens here: the corrective PA doesn’t break and instead price moves above the most recent swing high and forms a series of HH.
Once the Imp-Corr structure is broken, the next step is to look for new entries for continuation of the new trend or a reversal, using levels and compressions.
THOUGHT PROCESS: no break of Imp-Corr structure so shorts off (!) for now. So where am I going to look to get long? Where is the next level? – and what PA or levels would tell me that sellers are back in the game?
Messiness of PA inside the 3Min Bolli Bands and inside KLs
Looking at the 3MIN cahrt of the late morning PA, it is clear how fuzzy and random it is – not the kind of PA for taking breaks as they will go 10pts and then reverse. This is confused, directionless which will take the path of laest resistance – reversion to the mean.