Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
Recently the markets have been moving downward in a strong downtrend. An example of this is seen below on the daily eBay chart. When trading in a downtrend, a trader runs the risk of selling into a bear market rally. So you still need a method to sell at the right time even in a strong downtrend. One technique you can use is to apply the MarketWarrior stop and reverse indicator and a momentum indicator. When the stop and reverse indicator is indicating a down trend and the momentum indicator is at a high overbought level, it is a good place to sell short. On the chart below, the letters A, B, C and D identify where these sell-short entry points are located. This technique can provide easy to identify entries into a downtrend.
Stop and Reverse
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