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The long upward bar breaking out of box #1 represents 5 minutes, during which time an entry would have been made as prices violated the high of the congestion area as well as the high of three days ago. This trade could also have been made based solely on the fact that it broke out of congestion, but it is a much stronger trade when coupled with a breakout of the high of three days, two days or even one day ago. Depending upon our trading plan strategy, we could have taken a profit during that same 5 minute interval. If not that quickly, then as soon as any price bar made a new low. You can see that that is what happened. Please notice the long bar that broke out of box #1. Two bars later, we have a lower low than the previous bar. The same bar that gives us a lower low also gives us a Ross Hook because it makes a lower high. (See next page for the bars that make up the Rh's.)

Reentering the trade as that Hook is taken out gives a second profitable entry. Notice that three consecutive bars fail to make a new high as prices enter box #2. Many experienced traders might begin to exit right then and there. However, following the trading plan we exit again when prices on the fourth bar in box #2 make a new low.

Interesting are the two boxes marked on the chart. The first one represents a breakout of the high of 3 days ago.

These three highs [ together make u

The two highs make up the Rh.

The second is a breakout of the high of 2 days ago. Both are congestions just prior to an intermediate event.

Lower low

Notice that as the fourth bar in box #2 makes a lower low than the bar preceding it, it also creates a Ross Hook by making a lower high. Entering on breakout of that Hook results in a loss. The breakout bar, the highest bar in box #2, is a reversal bar. It is followed by another reversal bar. We must exit that trade with a loss.

Now, let's look at what happened in the last hour of trading.

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