Queries have come in about the current Help trigger as the signals aligned five days after the market low, states Ian Murphy of MurphyTrading.com.
When introducing this strategy in Way of the Trader I wrote, ‘We need a clear washout of the past five days’ lows, preferably in one or two price bars and the price bar must close positive (close higher than open) on the day we take the trade.’ I wouldn’t get hung up on this—as long as the trigger arrives soon after the washout and not after eight or ten days for example, then it’s okay. We need the trigger quickly because we will miss the first part of the move.
As it happens, ProShares Ultra S&P500 2x Shares (SSO) came within 11c of that first move (and first target) yesterday and may hit the spot before the much-anticipated Fed announcement on rates at 14:00 ET today. The stop and targets on SSO are shown above on the right. With two hours to go before the open, E-minis are slightly positive.
Learn more about Ian Murphy at MurphyTrading.com.