Root Timeframe

Day Trading with the Hourly Timeframe to Lead the Way

The elegant interplay of higher highs and higher lows organically shape the EMA9 as a dynamic reflection of price momentum and trend. This applies to all timeframes, but no timeframe creates a filter between lower timeframe setups (day trades) and higher timeframe setups (swing trades) better that the hourly (H1).

The hourly is our ‘Root Timeframe” that gives context to tell us whether to scalp day trading setups, or play for intra day swings.

For a systemised approach to trade along H1 EMA9, we can divide hourly swings into different stages:

• The Break Out;

• The Turn;

• The Pullback;

• The Reversal.

This sequence is designed to identify areas to get long. It works the same way into both directions, but all shorts eventually come to an end, while longs inevitably form pivots that might not be revisited for years. Hourly downtrends are buying opportunities, and we can short to participate in those downtrend, but ultimately have to understand that when then hourly downtrends end, price is going to give us a solid opportunity to get long.

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The Hourly Break Out

When price attempts an hourly break out, it typically takes a while before price is ready to backtest H1 EMA9, and we can use our understanding of lower timeframe entry concepts to participate in the hourly’s search for an exhaustion pivot.

Zooming in, an hourly break out or reversal is always an M5 or M10 push candle on high volume. The exhaustion of that initial lower timeframe break out offers a sequence of events that we can use to define risk for day trades and make a living.

To prove this, here is an M10 chart with four ranges marked, and experienced students see the M10 Diagonal Entry Model Break outs/down perfectly.