We are back on the 1-minute chart and looking at how to safely trade using the 55 SMA line. When the candle Close crosses above the 55 SMA, it is deemed to be Bullish and when the candle Close crosses below the 55 SMA, we deemed it Bearish. But we note that there are differences between the crossings of the 55 SMA.
It is important to note the angle of the 55 SMA. When the 55 SMA is descending at a sharp angle downwards, we note that it is rather bearish and even when the candle Close closes above it, we hesitate to take the trade as it is likely that it is a false breakout above the 55 SMA line and vice versa.
Chart 1: TiTTs 1 minute chart showing the Entry points and also the possible Exit points
The TiTTs 1-min chart above shows the possible Entry points and also the Exit points. In this potential trades, we chose to use the 55 SMA line as the dividing line between the underlying being Bullish or Bearish depending on the which side of the candle close it lies.
We take note of the angle of the 55 SMA line. The better entry point is when the candle crosses a nearly horizontal 55 SMA. A more aggressive technique is to use the LongTide understudies. In here, we stay in the Bullish trade as long as the 8 EMA is above the 55 SMA. So far, we have been rather cautious and risk averse and hence we also do not stand to gain a lot. Chopping In and Out of trades have a major cost in missing out on the Bigger trade.
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