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Old 10-05-2008, 07:07 PM
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Richard Krivo Richard Krivo is offline
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Trade with Moving Averages
Student's Question:

I placed a trade based on SMA 10&20 crossover which was confirmed with previous bearish engulfing pattern signal. Stop loss placed above SMA. Any thouhgts?



Power Course Instructor's Response:

That is an accurate example of how to execute a trade using Moving Averages. Once the faster MAs crossover the slower MAs, a trade can be taken in the direction of the crossover...in this case, to the downside. The bearish engulfing candle that you rightly point out, provides confirmation for the Moving Average signal.

As the angle of the MAs increase and the MAs begin to fan out away from each other, it indicates that the move strengthening.

Good work...
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