Trading the Euro using higher timeframes to show me where the market will go on the lower timeframes. This morning, on the 720 minute chart, price was right at the ATR. This should give me a bounce to the upside. The 180 minute chart was showing divergence on the lows, indicating a potential upward movement. The 45 minute showed a spring to the upside, as well.
Trading the Euro using the higher timeframe for direction, I zeroed in on the 3 minute chart. I waited for price to cross the slow moving average. Then an ADX magenta peak. Price pulls back to the ATR, on diverging volume, and both the 12 and 45 minute charts were bright blue. The risk on the trade was 12 ticks per contract. While most of the time I am only risking 8 ticks, 12 is within my limits, and the spring tells me the move should come in with momentum. I enter the trade.
I take one contract off at Clipper one and move my stop to one tick below the low at 1.2527. I look at the volume and it is increasing on the highs, exactly as I anticipated. We get a new low at 1.2540, so I move my stop up again. Price moves up but I notice that the 12 minute ADX is above 70. I opt to take the remaining two contracts off at Clipper 2. Price goes to Clipper 2 and I am out. Reward on this trade was 120 ticks while only risking 36 ticks.
What if you were unable to read your multiple timeframes? The Beginner’s Package captured the movement also. Notice how both Trade Entry indicators at the bottom are bright blue. This is indicating that the momentum on the higher timeframes was to the upside. And, when the ADX was above 70, the yellow dot appears to let you know to tighten your stop.