I discussed this point – the importance of using the daily chart’s “directional bias” – in my prior Chartology post but I wanted to share the real-world application in term of the price action we’ve seen the last two trading sessions.
The Monday session was a strong pullback on the shallow uptrend of the U.S. Dollar and despite the clarity of the intraday time frame market trends, the trends on most of the dollar-correlated pairs – notable the EUR/USD and USD/JPY – were counter the daily’s directional bias so my preference was to trade the set ups on time frames that did not require longer term follow-through which would need organized sentiment, momentum, and trend.
I will expect much less of this when the intraday is moving against the daily.
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