Trading Quiz #2
What do you make of this chart?
Time to dust off your technical analysis skills and take a look at the following chart, and tell me what you think…
I hope everyone found something of value from the last quiz, because we’re going to try another one.
Take a look at the chart below, and then add your comments below to let me know your thoughts.
The light blue line is the fast EMA (exponential moving average), while the green is a slow EMA.
The sorts of things you might consider in your response..
* Is this a stock/market that you would consider trading?
* Describe any trades you would have placed (if any) along with any likely exits (just describe as long or short entries, when they occurred and why).
* Are you waiting for anything to happen on the chart before taking an entry?
These are just a few suggestions on how you might answer this question, but I’m hoping you’ll take the time to comment with whatever thoughts you’d like to provide.
Happy Trading
Brian Dibbins
Elite Insiders Group - Trading Systems
Trade Profitably © 2006 - 2007
December 19th, 2008 at 12:05 pm
It is a tradeable chart (not a nice one though). The instrument that moves that much (note last red bar) needs management with a contingent stop-loss order.
There are two trades. One is entered on the 6th bar from the left (tall white candle). This is a bull break (presumably from a tight range) with an increase in volatility. Exit is near the area where 1st EMA cross is and the trade is breakeven or a small loss.
Second trade is another bull break (tall white candle) shortly after 2nd EMA cross. Exit varies depending on what kind of trailing stop loss is used. It is likely to be on the righmost tall red candle. Second trade is a profit or breakeven.
I would not trade this if it’s a stock. There are easier ones around. If it is an index then it’s okay to trade.