“The breaking of a longer-term consolidation (stage one accumulation or stage three distribution) attracts players from multiple timeframes (both shorter term traders and longer-term investors) who attempt to establish new positions near the beginning of a fresh trend. The breaks of consolidation levels from longer-term timeframes tend to lead to sharp and sustained movement due to competition from different timeframe participants for liquidity.
When trend begins to develop on a longer-term (monthly or weekly) timeframe, view it as a signal that there will be numerous trading opportunities in coming weeks, months and even years. Once underway, the fresh trend will create alignment trade opportunities after short-term pullbacks. Entries after these pullbacks typically offer a low-risk way to participate in established trends. The larger the volume on a break of longer consolidation levels, the greater the odds of a new trend being able to sustain the move. Fundamental developments that accompany a break higher or lower also increase the odds of continued directional movement as more participants are attracted to the action.”
an extract from “TA using multiple timeframes”
by Brian Shannon
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We have tested every system under the sun and amazingly, we have found one that actually works well. It is a very good system, but for obvious reasons, I can’t tell you much more about it. The basic premise of the system is that market move sharply, when they move. If there is a sudden range expansion in a market that has been trading narrowly, human nature is to try to fade that price move. When you get a range expansion, the market is sending you a very loud, clear signal that the market is getting ready to move in the direction of that expansion.”
Paul Tudor Jones II
