Enter your trade when the high (or low) of the first price bar that fails to make a new low (or high) is broken. The following list shows the steps required for both long and short entries :
Long Trade
- Price bars make lower lows
- Price bar touches the moving average
- Subsequent price bar fails to make a new low
- Subsequent price bar breaks the high of the previous price bar
Short Trade
- Price bars make higher highs
- Price bar touches the moving average
- Subsequent price bar fails to make a new high
- Subsequent price bar breaks the low of the previous price bar
In the trade shown on the chart below, the bar that failed to make a new low is shown in white, and the entry is shown by the arrow. The entry is at 1.2995, with a target of 1.3005, and a stop loss of 1.2990.
There is no default order type for the moving average bounce trade entry, but for the EUR the recommendation is a limit order.
As soon as your entry order has been filled, make sure that your trading software has placed your target and stop loss orders, or place them manually if necessary. There is no default order type for either the target or stop loss, but for the EUR (and usually for all markets), the recommendation is a limit order for the target, and a stop order for the stop loss.
