Today's candle came all the way back down and went below 61.8% retracement of the range of the past 2 days. If it closed under the 8ema we would have had to exit the position. But thankfully, price hit bottom and bounced back high enough to close right on the 8ema.
Today and the past 2 daily candles formed an Evening Star candle pattern, which is bearish. And we're still in a general down trend. This is a very squirrelly chart right now. The idea is it is going through a bottoming process. We have the bullish indications I listed on the first post in this thread, but this trade could still fail.
Even though we have an Evening Star pattern, we didn't close under the 8ema, so we held the long position for the long Memorial Day weekend.
I have a 510.2 call price. You're referring to the importance of the 8ema, I wonder. And I wonder if I should go to a long-term position or a short-term position.
ReplyDeleteHello Sosoya. Thank you for your comment. First, I should mention I'm not a registered advisor and can't say what you personally should do. I can only say what I would do for myself given my financial situation , risk tolerance, and trading style. Also, as you can see from my past trades on the blog, I certainly can have and have had losing trades.
ReplyDeleteThat being said, the trades I discuss on this blog are all swing trades, meaning short term. Don't expect to hold a position for more than a few weeks at most, but its possible if I don't see a sell signal. Its also possible I could exit the same day I enter if I see an indication to do that. Regarding the 8ema, I have found it to be an excellent trend indicator. When price is closing above it, the odds are bullish. When price is closing below it, odds are bearish. However, sometimes price moves in a channel that straddles the 8ema. If that happens its better to use the channel as the trend indicator than the 8ema. On this particular trade, I'm only interested in holding this position until price reaches 528, then I'm exiting. If we get a close below the 8ema, I'll exit then also as the odds are price will continue lower, in my opinion. Hope this answers your questions. Wish you all the best.