cmeade2 wrote: And so the Aucad might be a buy right now, despite the fact that the D1 TMA slope is quite negative?
Seems like a simple question but actually quite a lot needed to answer it.Well the fact that the D1 TMA slope is negative doesn't bother me per se - kind of the point of the thread I guess. Having said that it depends how the pair has reacted in the past and how fast the trend has been. Often it seems that very fast moving trends will pull back deeply but will have momentum for another push in the trend direction before moving the way the cross indicates.
If you have a look at various pairs you will see where this happens - EURCAD is perhaps a good example. If you see the cross happened after a fast moving downtrend on about 30th July. Price moved up then fell anther 160 pips from the level of the cross and over 300 pips from the height of the pull back.
As I said from the start with this method it isn't purely mechanical - it just doesn't work that simply (nor does anything I have found in Forex yet). So in this case I would look at other AUD pairs that were trending similarly and notice that they are nowhere near crossing back over yet - this in itself would make me wait until a significant cross had happened before going long.
And perhaps the last point is that the cross hasn't happened yet. We are dealing with D1 timeframe and, although I didn't explicitly say so, I always look for the bar to close after the cross as the TMA line is effectively not fixed until the daily bar closes. I never trade, with whatever method/timeframe I am using, until price closes beyond whatever line/level etc I am looking at.
Let's see what happens. I haven't entered yet but I am basically looking for an excuse to short with relevant price action/lower timeframe confirmation. I certainly want to see a clear close below 1786.4 and the blue TL.