Here’s Why The Big Picture Can Be 5 Minutes
When we look for entries on the intraday
time frame, it’s important to keep the bigger picture in mind. It goes
without saying that one needs to be aware of the daily chart technical levels
when looking for pattern setups, but also important, and sometimes not as
obvious, are the “extended” patterns that set up on the intraday
charts, on a continuation of the prior session’s action.
10:39:46
Intraday Setup Alert
The S&P500 ETF (SPY)
has established an extended 1,2,3 sell reversal setup. The SPY is down .24
at 84.23.
The SPY trade in the above chart shows a 1,2,3 sell setup after yesterday’s
run up back into an area of resistance on the daily charts. Today’s first hour
action was kind enough to establish a classic extended version of this pattern.
Risk on the trade was approximately .30 (I personally like to use .35 as my
absolute threshold for initial risk on intraday trades), after establishing the
slightly “higher high” 3 point.
If you had been looking at the 5-minute chart and isolated today’s action, you might have missed “this”
classic opportunity. The moral of the story is, sometimes the “bigger”
picture is your usual intraday time frame, but you just have to “expand
your horizons” a bit.