December 2nd, 2020
We had established in a previous post that the symbol UDN – our stock market proxy for the Dollar Index – needed just one more hurdle to jump and we would be into a trade.
Let’s start with a chart.
You can see on the right hand side of the chart that the moving averages have done their jobs: blue EMA (21) is above the green EMA (55) confirming that our uptrend set-up is in place; the trigger, the red EMA (8) and the price have closed above the blue EMA.
We should be all set to go. Our only impediment is a level of resistance marked by a black horizontal line. In order to vanquish this foe we needed a CLOSE above it.
You can see that took place just to the left of the large red candle.
The stop-buy was placed just above the green candle that did all the hard work closing above resistance at $21.41
Once the price touched that level we were triggered into a trade. A stop was then placed just under support at $21.16.
As a trailing stop, it is .25 below the purchase price and will stay with the price as it moves up. If the price, however, should fall immediately, the stop would stand still at $21.16.
And should the price immediately drop and touch that price, we would be stopped out, no ifs or buts.
10% of the portfolio = $14,000; 2% = $2,800
$14,000/$21.41 = 653.90, rounded to 650 shares
Risk = .25 X 650 = $162.50 (<$2,800)
All our process parameters have been met. We can only wish our trade, “god speed” at this point.
If you have any questions regarding the above, please drop me a line at: firstname.lastname@example.org
Just a reminder, I have a Masterclass that can be viewed for FREE going over this material.
Sign up here: https://tradingmadeeasy.gr8.com/ and a link to the class will be with you within 24 hours. You can then watch at your leisure.
How good is that? You are most welcome!