MOVING AVERAGE CHANNEL
This day trading setup by Jake
Bernstein uses a moving average channel to figure out trend and key support and
resistance levels. We will build a moving average channel with a 20-period SMA
of highs and lows.
RULES FOR LONG DAY TRADE
1.
Wait for two consecutive bars to move entirely above the high
of the channel.
2.
Buy as price tests the 20 SMA of lows (more aggressive traders can
buy on test of 20 SMA of highs).
RULES FOR SHORT DAY TRADE
1.
Wait for two consecutive bars to move entirely below the low
of the channel
2.
Short as price tests the 20 SMA of highs (more aggressive traders
can sell on test of 20 SMA of lows)
