Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
Here is another example of a market in a strong trend. This time the market is in a strong uptrend. This is a daily interest rate chart. One good way to trade a string trend is to use a MarketWarrior stop and reverse indicator. On the chart below, I have applied a stop and reverse indicator and three simple trendlines. When using a stop and reverse indicator, there will always be a series of small losses and a series of large wins. You must tolerate the small losses to be in the market when the large wins come. On the chart below, you can see where I have labeled 3 “small losses” and also 3 “Large Win”. The trendlines help identify an upper and lower swing boundary based on the previous part of the uptrend. This shows that the stop and reverse captured most of the up trend profits so far.
Stop and Reverse
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