The M5 DEM - Definitive Control Model

A detailed look at the model's technicals, and how to use it to trade in the direction of the trend.

In the previous instruction we had a look at the significance of the EMA9 during reversals. For this instruction we will have a look at how we can make money on the EMA9 pushing price into continuation, and we’ll have a first look at the concept of the failed breakdown, failed continuation as context for a reversal.

We will first now look at some technical aspects of the Diagonal Entry Model.

One Single Repeating Fractal

Markets are geometry. Patterns repeat, and all price action is governed by a single fractal: the zigzag. They come in different shapes and sizes, but all price action, all patterns are built from one that single fractal. This fractal creates the patterns that we see repeating. You can build any and all patterns from this simple fractal, and then you get to concepts like Cup and Handle, Head and Shoulders, Megaphones, but also the complete Elliott Wave catalogue.

These combinations of fractals make higher timeframe fractals to form recognisable patterns, which are nothing but larger versions of that same original fractal.

A deep dive into this concept is part of a later instruction. For now, I only want to plant the idea that you have to look at price action in terms of zigzags.

When you understand this, the idea behind the Diagonal Entry Model becomes obvious. Here is a technical diagram to illustrate how the entries set up.