Trading this morning was not Love the Dax. I hated it! It had taken off without me and I wanted revenge. I shorted TLs for no reason at all other than that they were there. So let’s look at the PA and see what strategies work in this situtation.

The best option is to avoid the situation as far as possible and that means using EAs. If the ON range is less than 50pts it makes perfect sense to take a breakout of the range. The same applies for post European close action. Should I use a breakout or a fractal strategy for these?

Back to today: this is a formation that you do not short because there is no signal, everything is telling you to buy: powerful move out of H1 compression + shallow pullbacks + staying above the M3 21 EMA.

 

The clue here is that it is charging through all the KLs without meeting any sellers. Even as the bands narrow just after the cash open, it continues to make HHs and LHs. So the strategy is to wait for a KL, see a 23.4% pullback and the jump on. This can be done using a JLo strategy or a TL break on the corrective retrace.

 

Instead you need to be looking to buy a break of the upper TL on a shallow retrace or look for cup and handle

 

 

This is a possible reversal, but it is still counter trend and you need to get out quick

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