Whats the trigger !!! Whats the trigger !!! Many in the channel think that all we do is counter trend trade and never look for the forward trend trade plan. Though true 70% of my trading is counter trend, we do some time look for the forward trend trade set ups. I am going to attempt to explain one of those in this blog. What will not be explained is the order management strategy, I will leave this for another time. This includes the stop strategy and scale in scale out strategy. In addition, not described here, this trigger can be used in conjunction with multiple time frames and support/resistance/trend lines – these are additive conditions to support the trigger being described.

First thing we need to understand is the chart set up, which includes a Bollinger Band set to 20MA with standard deviations of 2 and .8. The time period is not important but would recommend nothing less than a 10 minute chart, but I prefer the 60 minute chart. For the sake of this discussion the outer-band is 2 and the inner-band is .8. The 20 MA (moving average) is the 20 time period moving average. The following describes the trade set up and trigger (see thumbnail for its illustration):

1. Look for a market that is trending (up or down – in this example down) between the outer and inner-bands and potentially could be reversing. A potential reversal is when the price moves over the inner band.
2. The price then moves up to the 20MA and fails to continue up and then goes back down.
3. The price then cross or closes (depending how aggressive you are) back below the inner-band, but NOT make a new low. Some might take an early entry with a stop below the recent low.
4. When the price then crosses or closes back over the 20MA this is the trigger to go long. If the price continues to stall at its current price for too long (again depending how aggressive you are) you may want to bail out early as the up move is not confirmed and the down trend may resume.

This trigger mecanism for sure is not 100% and is not the only possible trigger available but is most likely a 70% to 80% trade. Keep a watch out for it and let me know how it works for you.