On the chart, you set two types of indicators above with the following parameters: ADX 14, SMA 20

Rules for buy orders:

  1. ADX line surpassed 30 and continued going up;
  2. Price reversal (compared to trend) hit the 20 SMA moving average;
  3. Place a buy pending order at the high price of the candle touching the SMA.

At point A: The buy-in agreement includes ADX over 30, price return to SMA20. However, if you watch carefully, you will not enter this order for two reasons. Firstly, since surpassing 30, the ADX has not increased strongly and is tending to go down, meaning that the force to push prices higher is no longer available. Second, the price in this period is very hesitant, unable to create new highs before returning to the MA.

Point B: This is a pretty good entry point, why? First, it satisfies both strategic requirements. Second, the price broke the strong resistance level earlier, the date and time threshold turned into support as evidenced by a small pin bar has been created at this level. You place a buy pending order at the high of the moving average, and if you are quick, you can place your SL below this new support, giving you an extremely good R: R (risk-reward) ratio.

Rules for sell orders:
  1. ADX line surpassed 30 and continued going up;
  2. Price reversal (compared to trend) hit the 20 SMA moving average;
  3. Place a sell pending order at the low price of the candle touching the SMA.

At point C: is a winning trade that satisfies entry, you place a pending order to buy at the low point of the candlestick hitting MA, place your stop loss above the MA intersection.

At point D: you should not enter this order because the ADX line is not strong and especially the price cannot create a new bottom before recovering. And you can also see two very obvious pin bars at this price point, which could signal a price reversal.

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