Bill Graves Veteran   Posts: 125 Joined: 11/25/2006 Location: Phoenix, Arizona  User Profile | Dee, The original ADX(14) > 30 rule still stands. When Price makes its swing high/low, we want the ADX(14) to be > 30 AND sloping up. The "Sloping up" check can be accomplished with a linear regression of the ADX. When Price begins its retracement to the 20 EMA, the ADX will most likely go flat or decline. We want it to stay above 25 and be above 25 at execution. EDIT: Dee, although the pattern is similar to a "grail setup", the ASIA trade does not qualify in two respects. On the previous swing high, the ADX was less than 30 and on 5/17 the ADX < 13. Had the ADX requirements been met, yes, the entry day would have been on 5/17 with a buy stop at 7.52. ASIA is still a nice pattern: it is a nice bull flag. In my opinion two least risky ways to enter: (i) on a pullback close to the 8 EMA intraday or (ii) a breakout above the bull flag's high of 9.13 on 5/23 ~ a buy stop MOC above 9.13. There is also some merrit to have entered MOO this morning based upon yesterday's bullish engulfing candle. CORRECTION: I must correct my post from yesterday about the "bullish engulfing candle". Bullish engulfing candles are properly utilized in downtrending situations to signal a possible trend reversal. Sorry about the mispost! The price action should be more properly termed an "outside day". Regards, [Edited by Bill Graves on 6/1/2007 10:36 AM] | |
