Multiple time frame resistance / support Fails…Now what do I do?
In January, we introduced the Multiple time frame scanner at ichimokutrade.com. It has changed the “face” of trading. Users now can scan the entire global for support/resistances that are for various time frames, not just one time frame. These are KEY support/resistance values. They are the boundary condition between an instrument being bullish or bearish.
Unfortunately, some traders are thinking “one sided”. For example, if you have a MTF resistance, traders are thinking it is “for sure” going bearish. Well, in this business, there is no “for sure”. There are probabilities. There is a high probability of it going bearish but doesn’t mean it has too. As a result, you put the trade out there and see what the market does. If the market does not to honor the high probability scenario, you will get stopped out for a MINOR loss.
At this point, what does the trader do? The trader’s that are not one sided, they will setup a trade to go the other way. Why? Well, the MTF resistance just turned into a MTF support and the market just indicated which way it wants to go. That trader then setups up a bullish trade. With a reward/risk of 3:1 or higher, one win will take care of your losses and you still will be profitable.
If you don’t, look at this live trade we took on the USDCAD currency in the Forex market. It was a bearish trade with a MTF resistance on 10m,30m,60m,and 120m. We lost and setup for a bullish trade. THe trade just exited with a profit just a couple of minutes ago.
As a trader, you should have no limitations!
EDUCATIONAL USE. Commodity Futures Trading Commission, Forex, Futures, Equity and Options Trading has large potential rewards, but also has large potential risk and may not be suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Do not trade with money you can not afford to lose. This is neither a solicitation nor an offer to Buy/Sell. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this document. The past performance of any trading system or methodology is not necessarily indicative of future results