Week 2: The Direction – Do Not Fight the River

In Week 1, we learned about the “Engine” (Inside Bars). Now we need to know which way the car is driving.

1. Time Frame Continuity (TFC)

The most common mistake new traders make is Shorting a stock because “it looks too high,” while the Monthly, Weekly, and Daily charts are all green. That is like trying to stop a freight train with your bare hands.

The Rule: We only trade in the direction of the Aggregate Time Frame.

• If the Month is Green, we look for Buys.
• If the Month is Red, we look for Sells.

2. The Ribbon (Saty’s Ribbon)

We use a specific Moving Average ribbon to visualize the “River.”

• Green Ribbon: The trend is UP. (Only look for 2-1-2 Bullish setups).
• Red Ribbon: The trend is DOWN. (Only look for Bearish setups).
• Grey/Twisting: The market is confused. STAY OUT.

Sniper Tip: A “Twisting” ribbon is the “Kill Zone” for your account. It means chop. We do not trade chop.