This weekend I realized I need to do chart homework. The measured moves are awesome and are a staple of my trading plan and setups but there is another one I had started doing but stopped due to my revelation with the 2 legged measured moves. What I am bringing back in (Mack highly recommends this) to my primary trading setups is the small trend channel lines. Time after time when you see price break out of the small trend channel line it will come back and make a new low (in a downtrend) before turning back up. You draw the line from the majority of the closes in a downtrend. Below are some charts where I just downloaded the whole day and put the entries based on Mack's trading criteria. You will notice time and time again that price will break out of the small trend line and then will come down and make a new low before reversing up (when in a downtrend). When price is in an uptrend you will see price break below the trend line and come back and test or make a new high before reversing. If you incorporate the 2 legged measured moves with this then you are doing really well in setting yourself up for great success.
I also need to remember to enter in at key reversal points which are the extremes of the trend lines, the EMA and support/resistance areas.
Your best entries come off the trend lines. Your second best entries come off the EMA.
This is going to take a lot more work and focus to get this down.
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