You spot the signal, then, you start looking back in time on the chart to see if the signal bar lines up with other key levels or has formed after a pull back within a trend or has some other type of confluence with the chart. Often, I will check the weekly chart when I find a trade on the daily or 4 hour, to see how that signal makes sense in the context of the longer-term time frame, or if it makes sense at all. A zoomed in view of the signal on the daily chart shows us that even with a stop loss just above the first tailed bar high (and beyond the level) there was still a huge potential risk reward on this trade because this market was truly in a runaway trend.