To answer your first question… Yes we ALWAYS take the opposite trade once the first order has stopped out. Reason being is because we never really know where the reversal or extension will take place. What we do know is that on every extension/reversal there is one candle which never gets engulfed. So by taking/closing a position after an engulf you can rest assure that you will be at the start of either an extension or reversal.
So say the move is up… Your first order would be a BUY (WITH the trend), Sell (Against the trend ; first order), Buy (With the trend; second order), Sell (Against the trend; second order)…
The bouncing off the MA line is your first order WITH the trend AFTER you have calculated the fibs, and you have broken the -23.6 or 123.6 This is important for the following reason. Once we are in accumulation, and either of the aforementioned fibs is broken you will notice that the price almost always attempts to head back into the accumulation zone. This is done to fake those who play the extremes (high and low of the accumulation level) into thinking that the push across the -23.6 or 123.6 was a fake. Below is the perfect illustration.
Each box which is highlighted displays a crossing of the two ma lines (ma 10 and 34) which we use. After the third crossing we then calculate the highest price of the LAST MOVE UP, and the last low of the retrace down.
The picture below shows you the rest of the move and how the price attempts to retrace back into the accumulation zone AFTER closing under the -23.6
Now because I trade with high equity and leverage. I always wait for the price to retrace back to the accumulation with it closing inside the two MA lines. So here you see once the candle closed red. I then had 2 mins of selling in which i gainned almost 10 pips, and hit my take profit of 7! On that one trade I would of made my highest % change for the day, as that formation is one my my biggest winners.
Please if anyone has any question about what I have just written please let me know. As this is a super super super important part of this system.