Here is one I don’t do to often, but this was a good setup, so I decided to take it. In the Bossilator Trade, we are looking for the Bossilator Indicator at the bottom of the screen to turn green (good setup) or red (even better setup) because price has been away from the 800 simple moving average (white moving average) for longer than is statistically normal. In that case, we want to trade back to the 800 SMA.
Click above to enlarge
I also like to look for a support/resistance level in the opposite direction because that gives me an opportunity to get in “cheap” and manage the risk by setting a stop loss below/above the support/resistance level.
In this case, there was a pretty strong support level. So I went bargain hunting and bought one lot near the lows of that range. My target was just before the previous high, giving me a good risk/reward ratio.
My plan was to stack up to four positions if price went up, but if price went down, I would just let my stop loss be hit on the one position.
Price broke the level and hit my stop loss for a -0.6% loss. That is the good thing about bargain hunting these Bossilator Trades. I can get in cheap and take a tiny loss. If I was able to stack my full four positions, then I would have probably had a gain of 2-3%. I will take that risk/reward ratio any day.
If you enjoyed this article, you might also like:
Category: 
Tags: 
