Trade Entry using MA’s and Stoch/RSI

In the image below the same trade setup but a lot of differences.

• ✔ The 20 SMA is angled up 20 EMA is angled up
• ✔ The Price bars are completely above the 20 SMA and closing above the 20 EMA
• ✔ The entry signal is there with a green bar closing on its top and closing above the 20 EMA
• ✔ Price has touched the channel line or within 1 tick
• ✔  Price made a higher swing high and higher swing lows
• ✔ Price did touch the drawn support line or within the support line from the previous swing high.
• ✔ The Stoch/RSI is above the white line indicating strength

Here is a YouTube Video of my entry on this trade: https://youtu.be/7hSh1TwuFdA As you can see in the video the channel entry line isn’t drawn but you can see the same channel line at the bottom of the video. I copied this line and moved it up later to write this lesson. I made the entry using the support and other entry ✔’s above, which are the main items needed for entry.

Sometimes our channels can be off and we can miss good trades depending on channels alone. Using the other ingredients for trade entry can still make a successful trade even if you have not drawn the channel in the exact location you enter the trade.

Here is a trade I took that was trending strong to the long side and I did not have any channels. https://youtu.be/mES9Uzhg380. In this video you can see all the other ingredients for trade entry described in the lesson were there.

In the 1st image below is the same type setup later in the same day.

• ✘ In the image below you can see the 20 SMA is pointing down and 20 EMA is pointing down.
• ✔ Price Bars are closing in their upper half for correct entry signal.
• ✘ The price bars are below the 20 SMA and below the 20 EMA which isn’t trending for a long entry.
• ✘ Price bars are closing below both the SMA and the EMA which indicates no strength for a long.
• ✔ Price has touched the channel line.
• ✔  Price made a higher swing high and higher swing lows
• ✘ Price did NOT touch the drawn support line from the previous swing high.
• ✔ The Stoch/RSI is above the white line indicating strength

As you can see in the 2nd image below this trade would have failed if your stop was below the low, a 12 tick stop would have let you get out at BE +1, but it is better to not take these trades when they are not setup correctly.