Here's a great email I received recently from YTC reader, Bijan:
I trade using YTC PAT 3min trading chart & 1min for triggers. I keep on coming across this 1min trigger over and over again (see charts below). I've never heard anyone discussing this type of trigger and wanted to get your thoughts on it's validity or not?
When the overall structure is in a setup area and you're looking for a trigger using the lower time frame is when I would use this trigger. The trigger is simply when the 1st bar is inside the prior bar and the prior bar is inside it's prior bar, that's when we would trigger above or below the 3rd bar (The charts below should clarify). On a micro time frame (much smaller than the 1min chart) this trigger would probably look like a tight range that were breaking out of.
Like I said, I see this often on a daily basis and it struck my curiosity……Thank you in advance for your input.