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Discussion in 'Complete Trading Education- Forex Military School' started by Administrator, Oct 13, 2011.
Please use this thread for questions, answers, and comments on this lesson.
I have 2 questions related to the lesson entitled "DMA and MACD cooperation".
1) On Chart #8: when you say enter short at nearest retracement (38.2% resistance), how do you enter? by placing a sell limit order slightly below 38.2%? or you will need additional confirmation besides bearish trend before you pull the trigger?
2) Quote:"1. This could be done, but this is more risky way. You can apply it, if some upward AB=CD pattern makes an Agreement with some Fib resistance. Second, if the market reverses from, say, a 0.382 resistance and MACD holds a bear trend. But here you need some reversal patterns on the 5-min chart to justify entering......." I underlined my doubt. Do we still need reversal pattern on 5min chart when hourly MACD is already in bearish trend?
nice questions buddy.
1. It depends on what is your context time frame. Here we have 60-min chart. If you trade at daily and use 60-min to enter - then you may place just order slightly below 0.382 and after that monitor that hourly trend remains bearish.
2. Here is the answer is you use 60-min chart as a context. In this case you need confirmation that 0.382 level will hold. Let's say, you see that 60-min trend holds bearish during retracement, but you do not know - will market proceed to 0.5 or may be even to 0.618. Because hourly trend still can hold bearish as well. For that purpose you drop your time frame and watch for sell signals or patters on 5-15 min chart that coincides with hourly Fib resistance levels. If you see, say, 15-min 1.618 butterfly "sell" right in agreement with 0.5 hourly resistance and hourly trend is still bearish - you can pull the trigger.
Thank you Sive for your swift reply. Your help is greatly appreciated.
Does the chapter on Multiple Time Frame Trading cover the subject on Context of Trade?
Yes, there will be chapter dedicated to multiple time frames. but it will be released a bit later.