This chart is a good example. Extreme levels have been noted on the 4 hour chart.
The line we are currently at, from previously, we might expect price to go short. Note on the 1 hour chart that previously if we wait for BOTH 1hr and 4 hr to be red we wouldn't get spiked out. Look at the 4 hour chart again and imagine entering around the 4hr opens in the correct direction, travelling away from the lines...WOW
So now, we are at a line, expecting to go short (maybe, it's already been tested a few times though and might break through) How do we know which way to go. OK, our bias is short but currently we don't trade short because 4hr candle is still up (if we want more risk for a better price we might go with hourly colour only, or if more advanced disregard colour altogether).
1hr is showing some action that price may be turning again. If it makes a top on the hourly, a new 4 hr starts we get 15 minute momo with both 4hr and 1 hr red, we can look for an entry short.
If however price has fallen back to our line we get 15 minute momo and both 1hr and 4hr are up, we think about going long (s/r flip).
All illusory of course but it can help. 'Training wheels'
