Context and the Complete System

Using intra timeframe awareness to identify high probability zones for potential entries

Dynamic Trend Following works with just the three diagonals, and as long as you identify the leading timeframe, you’ll be able to trade successfully without spending a lot of time at the screen. But as you progress through the courses, for those of you that want to do that deep dive and get more technical about price action, the advanced models and concepts (setups and edges) allow us to increase gains significantly, and even accumulate risk free positions before a higher timeframe diagonal entry model even forms.

Market environment is important. Earlier this year, markets were in a strong uptrend, and then the M5 DEM is a brilliant way to buy the dip. All you have to do in trending market, is wait for H1/H4 to end that uptrend, and then look for M5 DEM into each of the legs lower. When markets enter weekly consolidations, these concepts become less effective, because essentially, there is no uptrend, and price will often set up volatility instead of contractions, not allowing us to properly define an M5 DEM for a swing into an hourly up or down trend.

In addition to the Diagonal Entry Model, we have the RT concepts, the EMA Boxes and the EMA Dance, and we can use these concepts to pull money from markets under all conditions and circumstances. The models even allow us to trade M5 ranges and pure volatility.

So while I am giving this more consideration, I figured that to most of you, perhaps you are wondering how it all fits together, where to use what, and primarily, WHEN to look for that classic, textbook M5 DEM.

So let’s look at price action and allow me to demonstrate where to look for what, and how to use the H1 timeframe for M5 and LTF context. We’ll start with this sideways range, and it is just 8 points wide.

There was an EMA9 trend, and that brings us to the original diagonal entry model: when an EMA9 trend would end (BoT), that is where I would look for a diagonal entry. The shorts were always more difficult than the longs, and the reasoning was the higher timeframe uptrend. Bull market, H1, H4, D1, W1, all of it is pushing higher, so shorts are not something to immediately consider, unless you see a solid opportunity for a scalp. One of the criteria for an M5 DEM short was the overbought RSI. Regardless, in this case, the only place to look for an M5 DEM, was when the EMA9 trend ended.