We don’t have any trades to report, just a couple ongoing, but I would like to discuss when to place a trade.
First of all when I say that our trigger is a cross above or below the 21 or 8 EMA (exponential moving average), to be clear, I should be saying close. I like closes because they are an indication of the price at which investors are prepared to leave their positions overnight – these days, that is saying something!
I also like to enter a trade by way of a stop-buy just above the high of the candle that closed above whatever. If we are going short, not you, of course, I mean me, the stop-sell is just below the low of the candle involved.
S&P 500: The index has been in a downtrend per our EMA definition (21 below 55). The price has crossed and closed above the 21. We are now waiting for a close beneath the 8.
Oil: Almost the exact same story as the S&P 500. A short as signalled by a close below the 8 would have to go beneath the fairly significant support at the $20 mark.
Note: when I talk about shorting, we would revert to a stock symbol that would do the same job.
Bitcoin: The price of Bitcoin has crossed above the 21 EMA, but the 21 is still below the 55. Based on our definition, it is still in a downtrend. If the price drops below the 8, we will have a short sell. Maybe by that time I will have come up with a suitable proxy.
Apple: Apple is still in a downtrend for our purposes. The price has bounced off of resistance otherwise known as the 55. We are now waiting for a short signal.
For a little excitement I thought I would show a Point and Figure chart of Apple. On the right hand side, we can see that if Apple closes above $273 (or an x appears above that line), we could see a pop to $311.
We are trading on our moving average system for the purposes of this blog, and will continue to take all signals it generates based on our rules.
EUR/USD: our lone currency pair has given us a trade that is still in play. It gave us a short signal. We reverted to a stock symbol that is our proxy in the stock market for this pair. The symbol is EUO. It is what’s know as an inverse ETF. This means its value rises as the pair declines. Our trade here is still in play. There is a trailing stop on it as well as our UGL trade.
That is it for this installment. If you have any questions at all as they pertain to trading, please drop me a line at: email@example.com.
Keep your masks on,