In addition to the two entries I descibed previously, there is another way to enter trades. Price will decline to the level of the 72 EMA, causing the shorter EMAs to turn around. It then finds support at the 72 EMA, consolidating for the better part of a day (if not more), and establishes a trading range. We can anticipate a break of that range back in the direction of the trend, placing an entry order at the top of that range, plus 1 pip, plus the spread. This was how I entered my trade on Friday.
When we are in a swing trade, and we see price starting to stall, we need to anticipate the price level that would cause the 12 EMA to cross back under or over the 24 EMA. We can either calculate this algebraically (a pain without an MT expert indicator--hint hint), or simply draw a trendline once we see the shorter EMAs begin to flatten out. I am a fan of Tom Demark's "TD" trendlines. We draw the trendline from the most recently established significant low or high back in time to the previous significant low or high, and place a stop loss order (NOT a take profit) at that price. Sometimes the EMAs will cross without breaching the trendline, and we simply exit. But violent reversals do present themselves, and we have to be ready:
http://img145.imageshack.us/img145/5...pybreaksr0.gif
Notice how I also drew a trendline on the highs. Declining highs are a warning sign. When price fails to break out from a trendline drawn on them, a reversal may be at hand. Indeed, you could have exited before the lower trendline break when you saw the bull trap and subsequent sell off. But it takes experience to properly judge these conditions.
When we are in a swing trade, and we see price starting to stall, we need to anticipate the price level that would cause the 12 EMA to cross back under or over the 24 EMA. We can either calculate this algebraically (a pain without an MT expert indicator--hint hint), or simply draw a trendline once we see the shorter EMAs begin to flatten out. I am a fan of Tom Demark's "TD" trendlines. We draw the trendline from the most recently established significant low or high back in time to the previous significant low or high, and place a stop loss order (NOT a take profit) at that price. Sometimes the EMAs will cross without breaching the trendline, and we simply exit. But violent reversals do present themselves, and we have to be ready:
http://img145.imageshack.us/img145/5...pybreaksr0.gif
Notice how I also drew a trendline on the highs. Declining highs are a warning sign. When price fails to break out from a trendline drawn on them, a reversal may be at hand. Indeed, you could have exited before the lower trendline break when you saw the bull trap and subsequent sell off. But it takes experience to properly judge these conditions.