Entry diagonals are nothing more than diagonal lines above or below which buyers or sellers take control. The EMA9 is central for the Diagonal Entry Model, and the instruction is clear: probability is higher after EMA9 has been tested and continuation is faltering.
Still, the most basic principles of price action prevail over the guidance we receive from indicators, and we can use these principles as we attempt to assess how aggressive we should be.
Price only reverses through failed swings and failed breakdowns. The failed breakdowns are the highest conviction trades, because they tell the entire group of traders that is watching the setup, that a reversal is taking place. Failed breakdown reversals can typically be taken aggressively and immediately. Failed swings are price patterns that make a higher low, then has price looking for a lower high towards the prevailing trend. These are hesitation patterns, and although one risks missing out on significant gains, failed swings are best traded when price offers confirmation in the form of a backtest.
How you choose to approach these setups is entirely up to you. One thing in markets is important: price action and patterns are repeatable, and therefore you have to be consistent in your approach. If you commit to a specific setup, you have to trade it the same way every single time, otherwise you end up with random results.
Here is a look at four different entry diagonals, starting with the failed breakdown: