Today's price action in the market reminded me big time on how important the 60 minute chart is when determining if a lower time frames setup will workout or not. The first two hourly bars were green but the 3rd hourly bar was a solid red bar. As I've mentioned before the market swings 3-5 bars in both directions, so if you have a big red bar, you should expect another red bar 80% of the time until you have 3-5 in a row, then you should be thinking that the next bar could go green. In the Q's today we sold off hard for 3 hours with the last hour having a bottoming tail bar as it closed red. Within 25 minutes the hourly bar had gone green (COG) and engulfed the prior red bar with the bottoming tail, at this point you should be thinking that were going higher. You will also notice a 15 minute sell setup that actually triggered by a penny and failed as it should have. Once you have a COG on the 60 minute chart you should always expect follow through in that direction, thus after the green COG bar on the 60 minute chart followed by 3 red bars to the downside the odds are, the 15 minute sell is going to fail as it did today.
Here is a similar setup from today in the IWM which is another low odds play as the 15 minute sell was about to trigger after a COG had formed on the hourly chart...
Here is the same chart near the end of the day showing the 15 minute sell failed to trigger as prices moved higher...
IWM example II
By focusing on the 60 minute chart you will greatly place the odds in your favor, that you will be trading in the right direction.