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Entry Rules Identify the Highest-Percentage Patterns
Lets recall for a moment, our first step…
(Scroll Down For Video)
Step #1 was to use our Auto-Levels Indicator to locate the very best levels to use, and then look for simple price patterns such as the Wave, 2-Step, and Breaker to enter the trade.
Once we see those important patterns show up around those important price levels, we have to look at Step #2…
Now we much use our entry rules to identify these patterns as either HIGH or LOW probability in order to make sure we are taking only the very best trading opportunities.
Before we can do that, we must be aware of what those rules are.
Our Advanced Members receive a full, detailed copy of our entry rules, but for live trading, we use a shorter version, which we call the ‘Cheat Sheet’, and there is a copy of these rules posted on our blog for your reference.
Let’s go over these rules 1 by 1 for each pattern set-up so you can get familiar with them…
Its important that you are aware…these rules are listed in order of importance, so the first on the list is checked first, and the last is checked….last.
Wave Set-Up:
• Breakout Above/Below
• Trigger Line HH/LL
• Perfect Pattern
• 6-8 Ticks
• Medium & Slow
• Trigger Slope
• Momentum (check this last)
• Speed of Tape (POT) (check this last)
o D/Q: Time/Price/POT
The Wave Set-up is a trend-continuation pattern that works best on trending markets. This entry pattern looks to capitalize on a moving market, look for Swing-Highs and Swing-Lows as well as a steep slope to our Trigger Line for entry.
Beware taking Wave Set-Ups in low volume, or sideways markets, as it has a tendency to reverse direction.
Breaker Set-Up:
• Breakout Above/Below
• Swing-High/Low
• Perfect Pattern
• 6-8 Ticks
• Medium & Slow
• Trigger Slope
• Momentum(check this last)
• Speed of Tape (POT) (check this last)
o D/Q: Time/Price/POT
The Breaker Set-up is a trend-continuation pattern that works best on Sideways and Trending Conditions.
This entry pattern looks to capitalize on a moving market, look for Swing-Highs and Swing-Lows around the major levels of Support and Resistance which are market for you automatically using our AUTO-LEVELS INDICATOR.
Beware taking Breaker Set-Ups in the CHOP ZONE & around low volume times in the market.
2-Step Set-Up:
• Short-Term Trend
• @ Extremes
• 6-8 Ticks
• Medium & Slow
• Momentum(check this last)
• Speed of Tape (POT) (check this last)
o D/Q: Time/Price/POT
The 2-Step Set-up is a counter-trend pattern that works best on Sideways markets.
This entry pattern looks to capitalize on a choppy market, look for Swing-Highs and Swing-Lows marked with our Swing Indicator to identify your entry.
Don’t forget…You need to see FOLLOW-THRU to confirm your entry!
Beware taking 2-Step Set-Ups without identifying the Short term Trend, because this pattern should be taken against the trend, looking for a reversal in price action.
Let’s Recap…
Step #1 is to let our Auto-Levels indicator find the most important levels of support/resistance.
Once we find those important levels, we then wait for simple patterns to develop around those levels, such as the Wave, Breaker, and 2-Step as we’ve discussed in earlier videos in this series.
With those patterns now developing, we check our detailed and specific entry rules (Step #2) to identify the pattern as either being HIGH or LOW probability.
If the trade does NOT meet our entry rules criteria, we will avoid the trade, and potentially look for that trade in the opposite direction using our 2-Step Counter-trend reversal entry pattern.
If the trade DOES meet our entry rules criteria, I will then move to Step #3….Look for Confirmation so we can enter the trade with confidence.
In our next video we will discuss Step #3, which is the final part of this process, which is to look for the confirmation of the move, and enter the trade.
Keep an eye out for video #3 of this series later this week.
