Hi Everybody,
This is a question I get asked a lot, and that is when to consider DP setups. The reason this is not as easy as the other setups is because the DP is a “trend termination” setup. So it is like standing in front of a train, in that you will get squashed if the current move is a strong trend. So when should these be avoided and when can you consider taking them ?
As always, the answer is in the “larger degree trend”. Yes we have the STF on the “current chart, but as well all know, all indicators are lagging (by their very nature), so we look to the larger degree chart for DP’s and WPT’s. Let’s take a look at an example on the 3min TF (Russell Index) from yesterday.
As you can see, this was a very good looking DP sell setup, that had a number of other techniques all pointing to a high as well. But the STF was blue. So normally I would suggest “Standard” traders avoid trades that are “against” the STF colour. BUT, lets now take a look at the 15min Chart.
Thanks, Steve
This is a question I get asked a lot, and that is when to consider DP setups. The reason this is not as easy as the other setups is because the DP is a “trend termination” setup. So it is like standing in front of a train, in that you will get squashed if the current move is a strong trend. So when should these be avoided and when can you consider taking them ?
As always, the answer is in the “larger degree trend”. Yes we have the STF on the “current chart, but as well all know, all indicators are lagging (by their very nature), so we look to the larger degree chart for DP’s and WPT’s. Let’s take a look at an example on the 3min TF (Russell Index) from yesterday.
As you can see, this was a very good looking DP sell setup, that had a number of other techniques all pointing to a high as well. But the STF was blue. So normally I would suggest “Standard” traders avoid trades that are “against” the STF colour. BUT, lets now take a look at the 15min Chart.
Thanks, Steve
