DTF Principle: Degrees

Understanding Trend Structure

Degrees refer to a relationship between price and time. We track these degrees through my signature DTF system (Dynamic Trend Following) by using the EMA9 and the EMA50, and recognising their relationships across timeframes ( for example, H1 EMA50 = H4 EMA9 ).

Corrections/consolidations mark pauses in trends on particular timeframes. For DEM, I teach you to look for the leading timeframe to give the BoT, to confirm a break of the leading trend. The leading trend is the one to initiate the reversal, or set up continuation. In addition, the leading timeframe holds the key to the duration of the pause in trend/consolidation/correction.

An example is an EMA9 correction. Say an EMA9 correction is 4-6 candles on average (sometimes fewer, sometimes more, but for the sake of an example). If you translate this into time per degree, then on a 5 minute chart that means 20 to 30 minutes. On an hourly timeframe, that means 4 to 6 hours.

If you look at charts, for example this one below, it is fairly easy to accept and understand that these are two unrelated corrections. They are of difference size in price as well as time.