Look at the chart.
First, we check if the chart is bullish and the trend is intact.
1. The 20 day average line is above the 50 day average line
Yes!
2. The moving average dotted lines are pointing upwards (between 1 o clock and 2 o clock clock positions),
Yes!! Yes!!
3. The moving average lines should move smoothly upwards, almost parallel to each other.
Oh Yes!
4. The Power Ranking is greater than 3 (This is preferable)
Not applicatble..as I did not use DreamTai software for analysis.
Corn price moved into the bouncing pad area between the 20 days and the 50 days moving average.
Then, it rested for some time and started moving up.
I purchased two December corn contracts at average price of 496.50.
I placed the stop loss sell order below the bar low.
The Corn just zoomed up and reached around 576.
Now, I have moved the stop loss order just below 500. Why below 500?
Because 500 is a round number and ususally the round numbers (Numbers divisible by 5 or 10) act as powerful support and resistance.
For low risk trades, just look for a trending stock/commodity/forex.
Wait till it reaches the bouncing area between the 20 days moving average and the 50 days moving average.
Then place the trade and place the stop loss at the lower end of the 50 days moving average.(or above 20 days moving average if shorting)
Sit back, relax and wait for the cash register to ring.
See the video below:
