Oct 11th TF Chart

Oct 11th, 2010

This is a snapshot from today of the TF three minute chart. At the top of the chart we had blue bars telling us that the move up had high odds of being over and then the TF went up to attempt to break the blue bar high. This is what we call a false blue bar breakout meaning we are not interested in that move long unless there is a specific pattern after the blue bar high.

From that high the TF fell down and made a low at the 692.50 area. Notice how the blue bars came in at that low as well. We use the blue bars as a alert on both the long and short side. Once the blue bars come in we trail the the high or low of the last blue bar and let the market take us out of the trade.

It is a important thing to see because even if you were not long going up into the high or short going into that low it will still give you odds of what you should be looking for meaning; we know not to enter long after a blue bar high or short after a blue bar low.

Happy Trading,

www.eMiniSchool.com

PS It does not matter if you trade the three minute chart or the scalper we stop trading in the direction once the blue bars come in. It is the thought of "if i would not go long on the three minute I know to stop going long the scalper by default". Time frames are just tools for entries the indicators give us odds to the pattern and the direction of how far the pattern could go.