Kardec Trader shows how to filter trades instead of chasing them: wait for price to hit a key level, break the trend line from the most recent swing, then enter on a pullback that tests the moving average. This keeps you from trading every setup.
If I'm looking at trend line break, price has got to come in and it's got to hit the level. Then we've established a trend line based on the idea that we are working the most recent low. Well, in this case, the most recent lower high creates the lower low. Price has to come up and break the trend line. So at that point, once that trend line is broken, Market X comes out of the main watch list and goes into what I call your possible trade list. So it's one of your shortlisted markets because it's in the trend line break condition. It's done the two initial technical triggers, hitting the level and breaking the trend line. What I wait for is I wait for Price to break the last lower high in the move. If we think back to our conditions, if I'm looking to trade against the trend down here, much more risky. But now I've got a bounce off the level, got a break of the trend line and Price has told me it wants to go higher. So, very simply, all I will do in that scenario, I will wait for Price to come back down and test the moving average. So if it comes down the moving average, that's my entry.
