Short

RSI Short Signal: Momentum Discrepancy Reversal Point(MDRP) Down

Updated

35 period MDRP Down signals a short sell or profit taking on existing long positions.

The Bears are completely in control as the "Continuity of Bearish Thought" continues its domination, this being indicated by the following points:-
(1) Presence of multiple Bullish Divergences;
(2) RSI rally high to under 60 level on Hourly Chart under 40 level on Four Hour Chart indicates 60/20 Bear Range stays in place;
(3) 9p SMA on Price remains under 45p EMA but on RSI is above on the Hourly Chart indicating SIDEWAYS to DOWN TREND;
(4) 9p SMA on both Price & RSI is below the 45p EMA on the Four Hourly Chart indicating DOWN TREND continues to be the dominate force;
(5) Price Support Levels continue to be routinely negated;
(6) Price Retracement Theory continues to support DOWN TREND momentum.

Hope this is of some interest to the trading community. Your comments are more than welcome.

Kind Regards
Phil A.

Trade closed: stop reached

2nd Entry Short @ 8540.00 stopped out @ 8909.99 (being 1pt above 1st Lower Swing Top) for a loss of 369.99. Unfortunate as trade started well making a downside break of triangle distribution but then stalled and rallied up to previous swing top.
Perhaps should have placed stop 1pt above the rally high @ 9097.79 as I did with the initial trade entry which still remains in play. Oh well hindsight is always 20/20. Will learn from this lesson and work more on fine tuning my stop loss placement.

Good news is that my overall trade strategy remains intact and my profit target @ 6952.53 still holds. RSI looks set to break trendline support and then the previous trough low @ 45.6347 which would effectively represent a failure swing and give way to a resumption of the downward move.

Further updates to come.

Trade closed: stop reached

Initial 1st Short Entry @ 8723.81 stopped out @ 9097.79 (being 1pt above initial rally high) for a loss of 0-373.98.

In hindsight after this trade initially moved favourably it would have been smarter to lower both of my original stops (being 9097.79 & 8909.99) to breakeven on the 2nd trade (ie. exit @ 8540.00) and taken a small profit 10.51 on the 1st trade (ie. exit @ 8713.30).

IMPORTANT POINTS TO NOTE
(1) Price MUST hit the target if the preceding downside trend is still intact. These target prices are SIGNIFICANT NUMBERS.
(2) If the target price is NOT exceeded on a closing basis, then the market is telling us that the current trend down is finished.
(3) Since the downside target was not hit we can now consider the trend to be UP unless we see evidence to the contrary. As a consequence we should also consider the possibility that the low @ 7625.25 may be FINAL LOW and we are now moving into the next BULL phase??
(4) You should never focus to much of your efforts on price & time predictions. Trying to pick tops and bottoms is for fools and will soon deplete both your dollar capital but more importantly your emotional capital. Your price targets should for the most part be short term and are merely a necessary part of your trade exit plan. Don't have a bias to being a BULL or a BEAR instead go with which ever way the market flows. Develop a system that will clearly determine the current "Continuity of Thought", either Bullish or Bearish and only trade in sympathy with the prevailing force. Should the dominate force be unclear to you step aside from trading until it is clearly evident.

Until the next trade ~ good hunting!
philtime

PS: REMEMBER MONEY MANAGEMENT is the MOST IMPORTANT FACTOR to your success: Start small and grow big.

philtime

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