DislikedAt the moment to keep things simple:
The cross of the 5/9 signals entry, but the dreaded whipsaw sometimes changes that, even on the 4hr. Simply because, MAs are lagging indicators.
Therefore, on the 4hr, wait for the dot to appear (in my case I change it to red for sell & viceversa), wait for the next bar to formed. Then:
1) Look for a trend change (the 5/9) to confirm this. The angle of the 9SMA will tell you this)
2) Look for the crossing of 5/9 (might lose some good pips, but its safer)
3) Switch around 1hr, 30mins charts to see when the dot is already there. Dont want to see it do any David Cooperfield stuff!
4) Enter trade
Ive notice the dots can teleport itself to other bars, which is cool when you are watching star trek, but not when you are trading 20m lots! It does this because the trend has changed.
Red dot appear, so you wait for the next bar to appear and whammo, you make an entry to sell. Then after a couple of hours, you noticed your are -40pips! What Happened? You manually backtest, and couldnt find a similar scenarion, where: Usually when a dot appear, the price starts to move into your direction but this time, and its still going the opposite direction even after 5 bars!!
This is where the 5/9 helps. Do not enter any position until the 5/9 confirms it!! But when it does, make pips is all you will be doing.
A suggestion of exit would be:
1) 1 bar after the opposite dot appear (look at the slope/angle of the 5/9 to confirm trend change); or
2) the 5/9 crosses
I hope that will help a bit.
I'll appreciate it.