An even safer way to play this, IMHO is to wait for a price pullback to the 200 ema then trade in the direction of the slope of the 200. So if 200 is still in a definite down slope when price pulls back . and price does not break it to the upside, re-shorting at the 200 is probably safer than the counter-trend trade.
Although I must admit I love counter-trend trading myself .. not sure why!
Although I must admit I love counter-trend trading myself .. not sure why!
DislikedNot sure I quite agree with this. If PA is below the 200 EMA then you can still take a long trade, especially if the PA is a long way below. Think of PA being on a piece of elastic attached to the 200 EMA - if it gets too far away then the elastic snaps it back towards the 200 EMA. This is noticeable in times when there is high volatility and volume - such as the times when 'Edge' has set for trading the system.
Your screenshot shows an excellent trade - but note that although price is below the 200EMA it is only just below it, giving it space...Ignored
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I'd rather make money than be right.