Entry Rules
1- We will first determine trend in the 3 TMAs by using the
TMA Slope indicator values.
Ranging TMA (-0.40 to 0.40): Trades can be placed in both
directions.
Buy Only TMA (Above 0.40): Place ONLY Long trades.
Sell Only TMA (Below -0.40): Place ONLY Short trades.
Super Range: Above 0.80: Hold longs till slope value drops
under 0.80, at which point you should close all longs.
Below -0.80: Hold shorts till slope value climbs above
-0.80, at which point you should close all shorts.
H4, D1, W1 slope values must be either Ranging or higher for
Longs or Ranging or lower for shorts.
2- Once trade direction is determined, we will look at the
D1 and W1 TMA and determine that there is enough room for the trade to move in
your direction before reaching the outer band of both. Example: If you decide
to go short, there must be enough room between the current price and the lower
D1 band (At least 150 pips) and the lower W1 band (At least 250 pips).
3- We will now wait for price to climb above the top band of
the H4 and D1 TMAs at the same time, before placing a Short trade or below the
bottom band of the H4 and D1 TMAs at the same time, before placing a Long
trade.
4- The Trigger: Once Rule 3 is complied with, the trade will
be entered once price turns around and touches the H4 Upper TMA band for Shorts
or the H4 Lower TMA band for Longs. Refer to Rule one again before entering
trade to make sure that the 3 TMA slope values are still Ranging or in the
direction of your trade. If they are not, wait until they return to the correct
slope values for your trade and enter then.
Even though not explicitly mentioned in the rules, it is
always a good idea to sell from under tested support and buy from above tested
resistance. This is always a good rule to follow. It will prevent getting into
a trade too early and will increase your percentage of winners. Valid support
and resistance areas are: 50 or 200 MAs, TMA centerlines, daily, weekly and
monthly pivot lines, etc.
Exit Rules for each type of trade
Short Term Trade (If used): Close the trade when price
reaches the opposite H1 TMA band. Reenter trade when price retraces to the
centerline of the H1 TMA. Make sure all slope values continue to be either
ranging or in the direction of your trade before reentering. You can do this
several times during a strong trending move.
Medium Term Trade (Standard trade): Close the trade when
price reaches the opposite H4 TMA band. Reenter trade when price retraces to
the centerline of the H4 TMA. Make sure all slope values continue to be either
ranging or in the direction of your trade before reentering. You can do this
several times during a strong trending move.
Position Trade: Close the trade when price reaches the
opposite D1 TMA band. Reenter trade when price retraces to the centerline of
the D1 TMA. Make sure all slope values continue to be either ranging or in the
direction of your trade before reentering. You can do this several times during
a strong trending move.
Credit to Alfredo
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