The fastest way to see results: Practice #5

Practice to Narrow Down the "Entry Point" in 1 Hour

Hello. This is THE DAYTRADE.

So far, in the two sessions, we have practiced on a 4-hour chart.

• #3: Look at only the 4-hour chart and decide whether the trend is up or down
• #4: Draw a single horizontal line at either the swing low or the pullback high

From this time, we will move to the next lower time frame.
Practice to narrow down the "entry point" on the 1-hour chartis.

Even if the direction is correct, if the entry point is off, you lose

The 4-hour chart can be labeled as “upward.”
So, should you buy right now?

The answer is, no.

Even in an upward movement, price action does not go straight up.
It goes up, dips a little, then goes up again. You proceed while repeating this pattern.

If you buy at a high point during the ascent,
you will be caught by the subsequent small drop.

Even though the direction was right, you lose.
That is because the entry point was off.

The role of the 1-hour chart is to decide the "location"

In my method, each time frame has a defined role.

• 4-hour chart: Determine the trend (up or down)
• 1-hour chart: Decide the entry location
• 5-minute chart: Wait for the entry timing

What we look at on the 1-hour chart is the pullback or retrace on the 4-hour chart.

A pullback is a temporary dip within an uptrend.
A retrace is a temporary move up within a downtrend.

I think of a pullback as a "buy zone" and a retrace as a "sell zone."
If you ride the trend, these are the candidate entry points.

And the pullback on the 4-hour chart becomes clearly visible when viewed on the 1-hour chart.
On the 4-hour chart it may look like a small decline, but on the 1-hour chart you can clearly see how far that decline has progressed.

We target pullbacks on the daily chart via the 4-hour chart, pullbacks on the 4-hour chart via the 1-hour chart, and pullbacks on the 1-hour chart via the 5-minute chart.
My basic approach is to drop the time frames step by step.

“In the middle of a rise” is not the entry point

There is one thing I want you to learn most from this practice.

Even if the 4-hour chart is rising, if you are currently in the middle of a rise, do not enter.

I understand the urge to buy while it’s rising.
Because you feel you’ll be left behind.

But that is not a location point.
Wait for the pullback. If the trend is downward, wait for the retrace.

If you look at the 1-hour chart and determine that “now is not the pullback,” that alone reduces trades that enter at off points.

How to practice narrowing down the entry point on the 1H

This time, we will not enter any trades. It is only practice to determine the location.

① On the 4-hour chart, decide the trend and draw one horizontal line
Same as #3 and #4. Decide up or down, and draw a single line at the swing low or retrace high.

② Open the 1-hour chart and see where you are now
If the 4-hour chart is rising, is the current moment in the “rising in progress” or the “pullback (falling in progress)”?
If it’s descending, is it in the “falling in progress” or the “retracement (rising in progress)”?

③ If you are in the middle of a rise (or fall, if it’s down), write “Wait” and end
Since this is not an entry location, this ends the practice. Being able to determine to “wait” is today’s correct answer.

④ If the price comes to a pullback or retrace, narrow the candidate entry location to one
Even on the 1-hour chart, there is only one horizontal line. Obvious targets like the previous high or low also serve as guides.
Decide exactly one location where you will “look at the 5-minute chart.”

⑤ The next day, observe how it moved from that location
Did it stop there? Did it move in the direction of the trend from that point? Or did it pass straight through?
More important than winning or losing is whether you can explain why you chose that location.

※The timing on the 5-minute chart will be described in the next session (#6).

“Waiting” is the most common and correct

If you continue this practice, probably the day you end up waiting will be the most frequent.

That’s perfectly fine.

Entry locations do not appear every day.
Being able to decide to “wait” on days when there is no location is itself a power that protects your performance.

Conversely, if you find an entry location somewhere every day, perhaps your standards for locations are loosening.

What to do today

• On the 4-hour chart, decide the trend and draw one horizontal line
• On the 1-hour chart, see whether the current moment is a “pullback (retracement)” or “in progress”
• If it’s in progress, note and end with “Wait”
• If it’s a pullback (retracement), narrow the entry location to one candidate
• Tomorrow, observe how that location moved

Summary

• Even if the direction is correct, if the entry location is off, you lose
• The role of the 1-hour chart is to decide the entry location
• What you look at is the pullback/retrace on the 4-hour chart
• In-progress rises (or falls) are not entry points
• Waiting will yield the most correct practice

Next time, #6 “5M only looks at timing.”

Pursue correctness more than winning rate.
In the right direction, at the right location.

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※Results vary by individual, and profits or the duration to acquire skills are not guaranteed.
※ Trading involves risk of losses. Outcomes vary by individual and profits are not guaranteed.