Although the higher timeframe suggests an overall bullish trend environment, jumping into long trades without performing a lower timeframe analysis is typically not the recommended approach.
On the lower timeframe, traders look for specific entry criteria and create a trading plan around their chosen strategy rules. There is a sheer endless variety of trading strategies a trader can choose from. This article does not have the goal of promoting a specific trading strategy, but to show the general approach of a top-down trading plan technique.
For this article, we can choose a common pullback trend-following system. And instead of immediately executing a long trade based on the Daily timeframe analysis, a trader waits for the price to provide a better entry price by moving lower.
The screenshot below shows the 5-minute timeframe. Instead of chasing the bullish trend on the Daily timeframe, the pullback trader waits for the price to move back to the Daily Pivot point (purple line) and shows a chart pattern that can be used for breakout trades.
Trading plans typically follow the if-then format. The “if” part describes a specific event on the price chart that the trader is waiting for and the “then” part describes the action that the trader is going to perform in response to it.
In this example, the if-then trading plan is as follows: if the price moves into the Daily Pivot point and then provides a chart pattern, I will take a long entry trade after a pattern breakout.