Working on the Entry… Part 2…. Lower Timeframe pattern trigger.
This is the continuation of the previous article about working on the entry. We have seen how to identify stall in the setup region to place a limit order closer to the stop which decreases the initial risk. Like I said, identifying the stall and to time the entry based on the stall at a minimum risk is one of the toughest things in trading to master.
There is one more thing in the Lower timeframe chart that can trigger us to place the entry order at a better price than our LWP, ie. Lower Timeframe Pattern trigger.
Lower Timeframe Pattern Trigger
Even this looks simple by definition. When a pattern is seen in the lower timeframe chart, we bring the breakout order from the LWP in trading timeframe chart to the point of a breakout of the pattern in the lower timeframe chart.
When I say pattern, it includes these three..
Candlestick Reversal Patterns.
Technical Chart Patterns.
- Trap Patterns
Upthrust and Spring are the ones that I love the most in the trap patterns.
In the spring pattern, price stalls at a price level and forms temporary support. Then it gives a false breakout to the downside and reverses. High of the candle that has broken the temporary support is going to our new entry point.
In the upthrust pattern, price stalls at a price level and forms a temporary resistance. Then it gives a false breakout to the upside and reverses. Low of the candle that has broken the temporary resistance is going to our new entry point.
- Candlestick Reversal Patterns
You can know everything about candlestick patterns in this book. It is a must-read for everyone who wants to use candlestick charts to the core.
I personally like to use Hammer and Shooting star, Bullish and Bearish Engulfing patterns in the lower timeframe chart as my entry trigger.
- Technical Chart Patterns:-
Technical chart patterns like 123 top and 123 bottom, double top and double bottom etc. in the lower timeframe can also be your entry trigger.
Entry must be given on evidence of the 3 pivot formation in the 123 pattern.
Entry must be given on evidence of the formation of second top or bottom at the support or resistance.
When one of the patterns from the above three categories is evident in the lower time frame chart, we move the stop entry order from LWP to the respective pattern entry point. Then we expect that the order flow from this pattern breakout will trigger the LWP which we have identified in the entry procedure. Until that LWP is triggered, manage the trade aggressively.
Feel free to add your favourite patterns to this list. You will observe a lot of patterns in real-time once you start trading and analyzing your trades. Like I always say, the experience is our best teacher.
P.S:- You must perfectly identify the setup areas before trying this in realtime. It needs practice and experience.
I read working on entry 1 & 2 . in both article you mention, use LTF for entry. then what is the use of TTF (i means 3 min. chart ) ??
as per my reading and understanding from entry 1&2 article, we use LTF for entry use, cause of we get perfect entry OR we get low-risk entry.
then we use only LTF?
why use TTF (3min. chart)??
Trend identification, trend violation pivot, strength and weakness in the trend, future bias and setup area identification and LWP identification is done in the TTF. With the word working the entry, I meant to try to get a better entry than that of the TTF LWP. You are a bit confused about the entries. We use LTF only to get a better entry and to fine-tune our analysis. You can work with the entry using LTF only when you are totally confident about your HTF and TTF analysis. You can avoid using LTF completely but that comes at a cost of some increased initial risk and missed opportunities when the risk to reward is unfavourable