HTF shows clean traffic, lower timeframes show minor resistances

Traders should be reacting to market data rather than trying to guess what will happen — you never know the exact levels where price will choose to continue or reverse. We react to price action through the use of advantage points.

Advantage points are minor support or resistance levels that may interrupt the flow of clean traffic. While it is true that the information the higher time frames carry provide greater importance over the lower timeframes, we cannot have blind faith in the higher time frames, so we REDUCE risk by using advantage points to:

• move our stop loss to the break-even point (entry level) — this means if price rejects back to our entry we are taken out and do not lose capital
• take partial profits — securing 25-75% of gained capital from this position, leaving the rest to run risk-free (Stop Loss to break even) to the final take profit level

In the day trading experience, you’ll find that most advantage points are seen every 10-20 pips — this is a large part of the reason the amount of pips we’ve won on the livestreams average to roughly 12-15 pips per win — the lower timeframes force us to take action in these intervals.

This does not mean this is always the case — there are occasional times where ranges are much cleaner, (think aggro days) and therefore, we are offered more room to work in terms of moving stops to break-even and securing profit.

Advantage points are useful because they give us a way of managing risk without being emotional or irrational. Many traders see that their equity gets to a desired level of profit and randomly decide at that point to manage risk, while in reality, the market does not care about how much profit or drawdown you are in. Price action will continue to do what it always does; it simply finds the next level of support or resistance.

Almost every trader has experienced a time where they have been in sizable profit before the position ultimately ends in a loss. It’s an unnecessary emotional toll; use advantage points to help you overcome that.

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