Today’s trade was a Euro Dec. contract with a sell order from a price of 1.14210. The price had been moving up and down but with an overall downward trend since the Moving Average blue line had crossed below the red line as denoted by the yellow X.
The first yellow circled red bar is our first chance to sell the market as it had the resistance of the Parabolic SAR green triangles above the price that it touched but didn’t break. If we follow our rules then we would exit the trade at the first small yellow line when the high of a previous bar was broken.
The second yellow circled red bar is our entry point at a price of 1.14210 where we would place a sell stop order just below its low. The downward trend has now had more time to form since the first yellow circled red bar while the price had tested the Moving Average red line without closing above it. We also have room for the price to move to our first price target of the Parabolic SAR red triangles which is also a previous low around the 1.14100 price. We would exit this trade as the price stalled and moved sideways at the big yellow circle near a price of 1.14050.
Once the price moved back towards the Moving Average lines, there was another opportunity to enter the market with another sell stop order from just below the low of the last yellow circled red bar. That bar is reversing the mini-trend of the five consecutive green bars while still moving with the overall trend. As before, once the price made its move downward, we would exit the trade when the price breached the high of a previous bar as shown by the last small yellow line.
The main trade would give us a profit of $200 and with a possible $150 more from the other two trades.