Nice One

Take a look at the one hour chart of the Dow Jones below.  At Point A (previously in the day) we see a test/shakeout - a bullish sign.  Also at Point B we see what looks like a test.  This bar finished at 1pm (UK time).  As mentioned before, I avoid being in the market at or before the Open, so watched what the market did on the Open, and then at Point C I see my opportunity - this is a test bar - down-bar, volume less than the previous two bars, and it closes near the high.  This means the market dipped down to the low of that bar and did not find any sellers, only to close near the high.  Now I want to find confirmation of this strength, so I look down to the 10 minute or 15 minute charts.  On this occasion the 10 minute chart gives me confirmation (see the next chart down), and at Point A I see a test.  It is a black bar, volume less than previous two bars, and a narrow spread.  At this point I enter the market long and exit at Point B where a sign of weakness arrives (a narrow spread, increase in volume, and Tradeguider has also picked this out as a sign of weakness).  The narrow spread coupled with increase in volume shows that the price has been capped and there is little interest to the upside.  I took my profit but, in hindsight, of course, I could have taken more.  BUT we don't have a crystal ball, and this is real money we are dealing with, so it's best to err on the cautious side (in my opinion).  It is with increasing confidence that we can stay in the market longer, and this is something we develop over time, using caution, practice, and minimising losses.  It is losses that erode confidence.  Always maintain good psychology so that you are strong for the next day.