HVA trades and Trigger Line Reading
Trigger lines crossed up or down is one rule; however, you must also pay attention to the location of the trigger lines vs. Fibonacci areas and distance (spread) between both triggers. The following configurations highlight the progression of a typical bottom. Focusing on the location of trigger lines relative to Fibonacci areas is a top priority. Think at all times; LOCATION + DIRECTION+ SPREAD when reading your charts, and they must agree for a high probability trend trade setup on the 5-1 chart. When triggers are spread out farther from each other but "properly" located at a top or bottom, HVA trades may be taken. Trend trades take priority for new traders. The 2nd trade a new user will learn to identify while waiting for trend trades will be the HVA trade. SEE HVA TRADE SECTION for trading rules.
Trigger line reading is vitally important while learning the HVA trades using the termination conditions you learn (step #2) along with the trigger line LOCATION + DIRECTION+ SPREAD. In the following example, you will focus on " the location" of triggers at the termination condition. Then you will also make sure that the direction of "some" of the trigger lines assist the entry at the HVA line generated by the T3 Market Flow. When the triggers are not on the "correct" side of the Fibonacci area, no trade should be taken. Not "all" triggers need to be crossed like a trend trade when taking HVA trades. Typically how many triggers you need to roll is dependent on the quality of the termination condition in step #2.
This same concept will be true when using the HVA line to do long trades from the bottom after a termination condition. Termination conditions must include the proper location of the trigger lines. In this case, no trigger lines below Fibonacci support. Then "some" of the triggers must cross in an upward direction. Then the correct entry order may be placed using the green HVA Line from the 8-range chart.
To take high probability trades, you must adhere to 3 simple concepts. First, the stronger the trigger line's momentum is, the better the trade will be. Second, never trade opposite the strong trigger lines. Finally, when trigger lines and support or resistance line up together, you will intuitively see the correct trades.
Momentum Trades and Trigger Lines
This concept can be seen clearly in trend trades and the following example of a momentum trade from the trading plan. When you wish to incorporate the 13-2 small triggers on your 5-1 chart, right-click on your 5-1 chart and click "apply template," select the chart template named "5-1 RENKO w 13 sm trigs". This will super-impose the 13-2 small triggers on your 5-1 chart. A momentum trade requires the small triggers on the 5-1 chart to be LEADING and above or below, depending on trade direction, the 13-2 strong small triggers. A VIDEO FOR SUPER-IMPOSED TRIGGER USE ON 5-1 and 8-RANGE CHARTS.
A glance at the rules written on the following chart for a momentum trade is described in the chart below. You will see how easy this trade can be when Fibonacci and two strong triggers line up. Note: when the momentum trade loses momentum, get out. Get ready for the next "trend trade."
When doing Edge trades using the strong trending look of the 21-3 chart triggers, the strength of the 21-3 trigger lines will be crucial. 21-3 trigger strength combined with the location of the trigger lines on the smaller entry chart is vital to high probability edge trading. Look for the proper trigger line location when the current price reaches the Fibonacci area you wish to trade on the 13-2, 5-1, and 8-range charts. In the following example, this concept is illustrated. This would be the pre-trade setup for a good edge trade.
Many times edge trades provide a second chance for a trade after a 5-1 trend trade has exited due to management or a stop-out. This is illustrated in a short video from the trade execution videos page.
In the following edge trade long example, the direction and location of the triggers at the time of entry is vital on the 21-3 and 13-2 chart. It is worth mentioning that the 8-range or 5-1 chart triggers "DIRECTION" will usually be against the edge trade entry. This takes some getting used to. For this reason, edge trading with a 21-3 chart is usually done only after more experience in reading the indicators has been achieved.
When managing trades, proper reading of the strength, direction, and location of the trigger lines is imperative to know when a divergence will terminate a trade. When done properly, capital will be spared. The following teaching moment shows that the trader did not manage this trade properly. This is a very typical case when the "last possible" trend trade fails. This trade "should have been" managed out with no loss based on the current weak 13-2 and down small trigger line direction on the 5-1 and 8-range chart. Exit would be taken after divergence is true on the 5-1 chart.
When watching smaller charts divergences and trigger lines, the exits you must take to conserve capital will also become obvious. In the following example, after higher divergences on the smaller charts are true, combined with the 8-range small triggers turn strongly against your position, this look will force you into managing your trade setups. Understanding the trigger lines look and expectations will be key to great trade management. See the trade management section and step #3 for more information on the management of trades with divergences on the 5-1 chart.
Finally, parabolic moves in the market will require the trigger line location on the 5-1 chart to be located correctly to the "termination condition" that you will use as the entry signal. In the following example, notice that each of the 5-1 chart entry areas, one to ones.
In summation, T3 trigger lines, direction, strength, and location play a vital role in everything you will do with Nexgen's trading plan. Please dedicate time to studying trigger line interaction with Fibonacci support and resistance by viewing historical charts using market replay.