Current Trend= Up until 3:00am ET; Down the rest of the day
Today I only looked for long trades until 3:00 am ET, and then I only looked for short trades after 3:00 am ET
6:15 pm ET-Cowabunga signal generated. RSI > 50, Stochastics trending up, and MACD was negative and gaining value. The entry was at 9819 with a stop at the most recent swing low which was at 9800. Since the signal came before midnight I set my target for the same amount of pips I was risking which in this case was 19 pips. This put my target at 9838.
12:30 am ET- There is a signal for a short trade. However, at this point our trend is still up so we do not do anything. Plus, we are already in a trade on the opposite side.
1:00 am ET- Unfortunately I am stopped out of my trade at 9800.
3:00 am ET- On the 4hr chart I now have a completed trend change candle. The MAs crossed on the short side which effectively changed the trend from UP to DOWN. From this point forward I was only looking for short trades.
6:00 am ET– There is a MA crossover for the shortside but MACD is negative so it voids our signal. Remember, for short trades our MACD must be positive and losing value.
Trade Result: -19 pips.
You look at the chart and say, "Wow, look at all those pips we missed!" I know it sucks, but it’s all a part of trading a system diligently…even if you miss out on some good opportunities. Be proud of yourself if you followed the rules correctly. There will always be another opportunity in the future.