Hi Andy and/or other expert duck hunters:
I decided to join this thread because I like to be with the winners.
After analyzing some charts with 3 Ducks guidelines, I have one question:
Sometime the price is above 1H and 4H SMA.
In 5 min chart it is under the SMA, then it goes above and also breaks a previous high (we should go long here).
But it quikly comes back below the SMA (it is like a false breakout of the SMA) and keeps falling.
It would be a losing trade had we bought the break of the SMA and previous high.
Here is an example (the two red circles shows “false break”):
I think this happens because in 5min it is actually a down trend: the SMA is sloping downward, price is making lower lows and lower highs, and we can draw a down trend line.
So, I think perhaps we should go long only if the 5 min SMA is sloping upward showing a good up trend (then we will buy when the price is above the SMA and breaks a previous high)?