Long Trade Using Double Moving Average Bounce

I received a request for an example of a long trade that would have been taken using the double moving average bounce trading system:

Adam, would you please show an example of a long trade using the double moving average system? Thank you.

The chart shown above shows just such a long trade on the EUR futures market (view the chart in full size). The requirements for a long trade are as follows:

1. Price bar touches the long moving average (the dark blue line)
2. Subsequent price bar fails to make a new low
3. Subsequent price bar breaks the high of the previous price bar

In the example trade, the bar that failed to make a new low is shown in white, and the long entry is shown by the yellow arrow. The entry is at 1.5694, with a target of 1.5744 (shown by the green line), and a stop loss of 1.5674 (not visible on the chart). This trade easily made its 50 tick target, without going even 1 tick below the entry (i.e. the trade was never negative).

Further details about the double moving average bounce trading system are available in the double moving average bounce tutorial.