Hey there fellow traders,

I got a question in from a fellow pip sniper member and I wanted to give it some attention in todays market review. The question is in regards to the additional filter of the orange line in a SRC or BRC setup.

I have posted the question and answer below and have also made todays video highlighting this topic.

Enjoy and have a good weekend.

Cecil Robles

===================================================================
QUESTION: the second last page of the book containing all the slides from the course there is a slide entitled - Additional Filter # 1 The Orange lineYou say that if the reversal bar dips into the bar at any time the reversal bar is invalidated.Also if the reversal bar closes below the Orange line it is invalidated. Does this apply to both BRC's and SRC's. What if it closes above the line? Please clarify?

ANSWER: This filter can be good for determining whether you are in a parallel market or a counter-trend market. A parallel market is a market that is trending and we do not want to take reversal trades in trending markets. We want to take reversal trades in counter-trending or sideways markets or if the market has had a significant swift movement. So for the sake of this filter whether it is a SRC or BRC it will work. If it is a SRC that closes below the orange line or dips into the orange line it will be invalidated. If it is a BRC and closes above the orange line it will be invalidated.

The main key here is to really measure triangulation. Triangulation is the single biggest factor in discerning between good reversal setups and not so good reversal setups. I have inserted a chart example for you to see exactly what I am talking about.
===================================================================
VIDEO BELOW


{cdn_expires value='20090424_1410.swf'}

Labels: Frequently Asked Question, Market Analysis