koolgal
12-17 13:55
🌟🌟🌟When price hits a key moving average, is it better to add with the trend or wait for confirmation?

The 1st approach is more aggressive approach & involves buying or selling immediately the moment the price touches the moving average & assuming the long term trend will continue.

The advantage is you get the best possible entry price if the trend is strong & immediate.  However you risk catching a falling knife.  This may lead to significant losses if the trend reverses.

The 2nd approach of waiting for confirmation is a more prudent approach.  This strategy involves waiting for a signal.  This could be a specific candlestick pattern or bounce in momentum indicators, before entering the trade.

This approach reduces the risk & filters out the fakeouts or trend reversals.  However you may miss the initial part of the move or get a worse entry price.

I prefer waiting for confirmation as fakeouts and Bull traps are common.   Patience pays off.

@Tiger_comments @TigerStars

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Comments

  • snappyz
    12-18 16:27
    snappyz
    Patience is key. Confirmation avoids those nasty traps. Better safe than sorry! πŸ’‘
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