What if that signal is distorted by sub-5-minute volatility? Do you scale in to a losing trade (as Brooks suggests is a workable strategy) to try to deal with chop or just take the substantial loss?
As you know I know and like Al but I don't trade like him. I am all in and all out, if it's a loss, it's a loss...no big deal. I trade my tick time frames, if there is a qualified signal, I take it.
The market moves the same on all TFs ignore TFs, its just merely the level of detail you require. Scale in, yes you risk bigger losses, but less frequent and even bad trades get back to a small profit giving me an out, I dont take a 2nd or 3rd position if markets against me, looking for a cheap position 1 exit. Tricky tricky game.
As far as know in the 1st book I read, he says the 1 min chart is noise. Also, it would be more useful to post a chart when you are discussing Wed's moves to highlight what you are talking about. ES has fake out moves, so the best thing to do is not for example trade near the high of the day thinking it will break. In my chart we are not near the high of the day. If the high of the day breaks, you can then watch PA to see if it's a real break out or a failed breakout. For example, I would like to see full candles form above the high of the day and not a 1 tick spike above. Obviously, my chart does not show my stops, but my stops are where the market would tell me that the trade is wrong. You don't want to just chase a move thinking you are going to miss out on profit. Even if you miss out on a swing up, you can then wait for a valid setup based on your trading plan. There are at least 1 - 2 or more setups per day. The bard wire formation is probably the only term I actually use from his book, since I use my own system. What I mean by bard wire may be different that in the book, but to me it's sideways price action that is too small to form a range that would allow a range trade setup.
Here are some 1 minute charts of the ES including the HOD from Wednesday showing that the 1 minute charts have a very strong impact on the day's price action. The dangerous thing about this for discretionary traders, which Brooks fails to properly address, actually I think he says HFT has no impact on 1-5 minute PA, this could have been true prior to 2008.. The major moves within these 1 minute bars all happened in .01-10 seconds and would have happened faster if more discretionary traders were entering with limit or market orders, due to HFT adapting to order flow.
The night time ES chart you can eliminate. The resolution of price movements just wont justify the risk. Also I wonder how anyone can be fast enough to trade 1 min. Maybe with a good ui or some automation. You need to decide what setups you wanna play. Forget about HFT. Why trade other peoples/robots trading habits within 1 min periods? Noise is to be expected.