Disliked{quote} Hi Alan, From your chart, I noticed there were several bearish divs along the way up from 3 to 4. How can you avoid those possible hedges or accept all stopped out? Thanks {image}Ignored
I am not going to suggest we don't take a hedge or a short at these points because they are indeed legitimate signals.
What I will say is watch what happens after the signal. It should be the case where the div either touches or crosses the EMA but these ones don't do that so what is going on?
Look at the div pull backs, the 5 period stay in the valleys of the 14 period, to me this is a buy signal. So that being the case I better close the short ASAP.
The same thing applies on the underside of the 14 period, that is when the 5 period stays under the peaks of the 14 then these are sell signals.
You are right this makes things difficult at times that is why we have to have stops and move them accordingly to keep those losses tiny.
This is a good question everyone should take note of.
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It really doesn't matter ow we slice it if we lose a hundred pips with whatever leverage we still have to make 100 pips to get back to B/E. A $100 dollar loss on a low leveraged $10,000 account may not seem like very much but keep doing this and it becomes more and more difficult to recoup let alone profit from it. It can become a slow death because of this sense of safety. When you are in a very much higher risk situation it becomes a matter of a much quicker death, you have to get out or die.
