Failures often make very good signals and 1tf in particular make excellent markers of a turn in the market. 1tfs are also excellent with-trend entries, so you should be careful to distinguish between the two.
The classic 1tf is a failure caused by trying to take a reversal before a trendline break of sign of counter-trend strength. This is usually a continuation signal. Sellers below b14 (b14,15 inside bar variant requires an entry below b14) were trapped in a 1tf.
A 1tf can also be a reversal indicator in certain circumstances. For example, b25 was a 1tf above the prior swing high of b21 on an ii flag, which acts as a final flag. Similarly, the ii variant at b39 turned into a 1tf reversal. Final flag variants are often 5tfs such as b25 (went 5t above b24), but they can sometimes be 1tf as illustrated by b41.
There were another kind of 1tfs today. b6 trapped buyers in by triggering above b5 and took out its low by 1t before turning back up. Such a double trap followed by a 1tf is a kind of micro-wedge (3 pushes on 1m chart) and usually indicative of market direction change.
Hi Cad, what are your limitations for a FF variant (I assume you mean variant by bodies)?
ReplyDeleteHow far can the wicks stick out of the pattern? Was b39 a III?
B34 and b73 look like 5tf, that gave with trend signals.
"inside bar variant requires an entry below b14"
ReplyDeleteIf the IB is shaved - is the entry below/above it?
Does the IB has to have a shaved close or is a shaved open fine too?
Does the stop go beyond the outside bar or the IB if it's not a variant?
Thanks for all your efforts.
b39 was an ii
ReplyDeleteb34 and b73 were 5tf. Failures give signals with the failure.
Inside bar entries are always under the outside bar, except when the inside bar is large or if the inside bar is shaved on the entry side AND at one end of the outside bar
Hi Cad, thanks for your very detailed answers.
ReplyDeleteWould the (tentative) IB entry below b14 negated, if b16 didn't trigger the entry order? Or does the entry order stays in place until it gets triggered or the H of the SB (b15) is being taken out.