Kardec Trader explains how momentum traders use price-action breaks to set an origin point, then use pullbacks as reference points. When momentum steepens, weight the most recent trendline more heavily and track higher highs and lows to decide the next move.
Price action momentum point has been broken. So now what I'm looking at is a trend with momentum. Now what might happen is price pauses for a little bit and then pushes up higher. So in a scenario like that, if I get a pause or I get a series of lower highs and then price shoots off, I'm going to put more weight on that more recent trend line price. Over this shorter term period, the momentum is steepened. I want to factor that in going into the next phase of what I'm doing, the easiest way to remember it is price is going sideways, break that area, come up, come down. As soon as that first price action momentum point is broken, I've now now got an origin point. And then the second point is a reference point. If price continues in that fashion, comes down, trend line doesn't change. If it steepens. If price hasn't paused, I will actually cut through because I want to focus primarily on that area there. I want to focus on the most recent high low that has created a higher high.
