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How I use 4pma
Here is how I use 4pma to trade. I trade when the following 6 conditions are met(see screen shots):
Condition 1--price is above(for long), below(for short) two trendlines(lo x.px or hi x.p x)that are exactly the same. the first example shows price>lo1.p2=lo1.p3, and price > ma1.p2>ma2.p2, and price>ma1.p3>ma2.p3. So the first condition is the price to be greater(for long) than the trendlines, and greater than the sma's.
Condition 2--two trendlines to be exactly equal to each other, lo1.p2=lo1.p3(there is a typo in the charts comments)
Condition 3--the trenlines above the price(for long) to be exactly equal to each other, in the example lo2.p2=lo2.p3. This is our profit target for long.
Condition 4 and 5--ma1>ma2(for long) in both timeframes, 5 and 15 min in the example.
Condition 6--you have "clear road" between the two trendlines, no sma's in the way. you can have trendlines in the way. L:et's say you could have lo2.p1, or lo2.p4 before our profit target, it is ok. The sma's however provide monster resistance. In the example I didn't trade because the price had just broken the 233 period sma--ma7.p4(the one hour grid) at 1.1326, we got a signal to trade at 1.1327. It is a safe bet that the price will retrace after hitting the 233 sma. Look at what happened to the eur/usd twice this week. This is the biggest challenge that I have with my ea... I will post another example in my next post.
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