Two examples of higher time frame setups that I have had my eye on for the past 2-3 days. First an explanation:
As a matter of personal preference I like to set up my two time frames so that my "trigger chart" is 3-times faster than the "setup chart". Most of the chart examples shown on this blog for instance are of a 15-minute paired with a 5-minute chart. Beyond a 15-minute chart (which contains 26 15-minute bars) I also like to use a 39-minute (10 39-minute bars per day), 65-minute (6-bars/day), and 130-minute (3-bars/day). The way I trade I essentially use the faster time frame and it's 3/10-macd as a timing mechanism for entering the higher time frame setup. So, with that said, here are two higher time frame setups I was stalking the past few days which set up today.
LNKD - The daily was showing a 2c-2d setup which boils down to a trending issue that registers a momentum reverse divergence. I then look for a 3d setup on the faster time frame, in this case the 130-minute chart on the right:
So the 130-min had the 3d criteria going into the close yesterday, but so did the 15-minute chart (left chart in the set below) so I was looking to buy a pullback in the 5-minute fast line which presented itself in the form of a pennant or ascending wedge breakout at around 9:30
KSS - My attention was drawn to this issue based on the 3d criteria on the 65-min chart. When I see a 3d setup I look for the level of resistance which I feel needs to be taken out for a follow-through move higher to occur. A helpful way of identifying this resistance is by looking to the 3a criteria which preceded the 3d. In the chart below the 3a criteria showed resistance to be at the $48.55 level (thick blue line).
So this 3d setup was triggered before the close yesterday but today came the $48.55 test which was taken out 20-minutes into the day. The 50% and 100% projection targets weren't large winners, but the important lesson for me is to be consistent with familiar setups.
The setups I include on this blog are used in conjunction with the 3/10macd and the criteria I ascribe to it as a way to alert me to an existing condition of price. The key concept to take away from this blog is that I try to anticipate what will happen on the higher time frame by using a faster time frame to trigger the trade setup. I do not trade a "system" I use two indicators to clue me in to price conditions. Please read the Disclaimer located in the sidebar of this site. I can be contacted via email at email@example.com
I am always open to questions, comments, or suggestions on how to improve this blog.