57# Price Action with 21 SMA
Price action as key factor
Submit bu Buddy 14/12/2013
Price Actionis a key factor in determining if we are going to enter a trade or not.
Although the colored 21 SMA is an easy way to quickly see the current general direction of price,
Price Action ‐ due to a better overall picture so to speak ‐ further helps to confirm the direction of the trade.
For instance, as in the example below
in the case of a SELL we should look for recent Lower High(s) and/or Lower Low(s);
best if both occur but one of the two usually suffices to be on our side.
I repeat, we DO NOT always need both to occur otherwise we miss out on many good trades!!
A Double Top (possibly implying the end of an Upward Movement) also helps to confirm a possible SELL Entry.
For BUY set‐ups with respect to Price Action:
We look for Higher High(s) and/or Higher Low(s) to confirm a possible Entry, as viewed in the example below
A Double Bottom is another way of determiningthe end of a Downward Movement
which may also be usefulin helping to confirm a possible buy entry.