The upside breakout of the triangle in the daily chart of the U.S. dollar/Japanese yen (USD/JPY) pair in It has triggered a long trade. When would the entry be confirmed?
Many traders wait for the next trading day, but with the moving average convergence-divergence (MACD) histogram the entry can be taken as price pierces resistance. In this case the indicator settings used are the default 12- 26-9 . The MACD histogram displays the difference between the MACD line and the signal line, which is the ninebar EMA of the MACD line.
To confirm trades, the MACD histogram is used in an “on-off” manner. For example, to enter long after a breakout, the histogram bars must be above the zero line, which means the signal line is above the MACD line and price momentum is to the upside. Price triggered the entry as it traded up through the resistance of the triangle pattern (just above the 116.00 level). The MACD histogram was already above the zero line, so this trade was “pre - confirmed.”
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