A quick note on moving average trading. My basic rules are entries on a break and close above or below the moving average we are watching, with indicators turning in the direction of the break.
The stop is generally placed above the previous swing high or low of current price action, or if price breaks back and closes through the moving average with one or more of the indicators reversing path.
Entries can be made in a combination of ways. Either enter your full trade size on the next candle open through the ma. Secondly, entering 1/4 of your total trade size on the next openning candle through the ma, then place the balance of the entry at the ma to catch a pullback.
These are not hard and fastened rules but are merely a guide as to how I trade.
Always remember, price action is king. Indicators are merely a safety blanket for a favourable trade.
Tuesday, 9 February 2010
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