Here is a short trade based on Moving average cross.
Reasons for short
1. Price has made its way towards (100pips off) an intermediate swing level and supply zone.
2. Price has fallen beneath the short term moving averages (10 and 20) .
3. Price extreme - price is above the monthly pivot ( 70 pips ) and a long way from the long term average price ( 400 pips).
4. Momentum indicators are divergent to Price - we have seen price make a higher high , and the RSI and Momentum indicator have made lower highs.
5. Wave Analysis - would suggest the current high was a wave 3 and price may now move down into a wave 4 ( which will move to .382 to .618 of wave 3).
I see the demand zone existing at a confluence of Elliot minor wave 4 , .618 retracement of wave 3 , the longer term moving averages, midway between the monthly S1 and S2 pivots.
So what can we do for trade - for this trade i plan on using the moving averages
1. Wait for the 10/20 moving averages to cross on daily chart ( it will be soon)
2. For entry , go to the hourly chart. At NY close , set a Sell Limit order for the 7am AEDT candle 10 MAV.
3. Stop is set at the daily 10/20 cross or the candle associated with this cross high ( whichever R you prefer for risk management)
4. Position size off this R value .
5. Targets 1R, 2R, Open .
Trade management - set risk, minimise risk, eliminate risk , and protect profits. ( If you are profitable trail stop by 1R).
Exit - if not stopped out , exit trade when 10/20 make a cross in opposite direction.
Reasons for short
1. Price has made its way towards (100pips off) an intermediate swing level and supply zone.
2. Price has fallen beneath the short term moving averages (10 and 20) .
3. Price extreme - price is above the monthly pivot ( 70 pips ) and a long way from the long term average price ( 400 pips).
4. Momentum indicators are divergent to Price - we have seen price make a higher high , and the RSI and Momentum indicator have made lower highs.
5. Wave Analysis - would suggest the current high was a wave 3 and price may now move down into a wave 4 ( which will move to .382 to .618 of wave 3).
I see the demand zone existing at a confluence of Elliot minor wave 4 , .618 retracement of wave 3 , the longer term moving averages, midway between the monthly S1 and S2 pivots.
So what can we do for trade - for this trade i plan on using the moving averages
1. Wait for the 10/20 moving averages to cross on daily chart ( it will be soon)
2. For entry , go to the hourly chart. At NY close , set a Sell Limit order for the 7am AEDT candle 10 MAV.
3. Stop is set at the daily 10/20 cross or the candle associated with this cross high ( whichever R you prefer for risk management)
4. Position size off this R value .
5. Targets 1R, 2R, Open .
Trade management - set risk, minimise risk, eliminate risk , and protect profits. ( If you are profitable trail stop by 1R).
Exit - if not stopped out , exit trade when 10/20 make a cross in opposite direction.