As I embarked on my path to becoming a trader, I would come across phrases and euphemisms that didn’t really make sense to me. Quite similar to how Luke Skywalker felt and looked when Yoda was talking to him.
Let the force guide you
To which Luke would be asking what the heck is the force and how am I supposed to feel it?
Let the trade come to you
To which I would be nodding my head at my mentor, knowing that was important, but not knowing how to implement the idea.
Clearly I have not forgotten that phrase as it always rattled around in the back of my head, waiting for it to finally make sense to me. Much like Luke, it only made sense to me when I finally had enough experiences to put the pieces together and have that “Ah-Ha!” moment. But once you have it and it clicks, there is no going back. For Luke, that meant he knew how to use the force and overcome his enemies. For me, and the traders who I now grace with that phrase, it meant I knew how to wait for exactly the setup I expect and to then act on it decisively.
Let’s take this to an actual case study and may I reference my last blog about waiting because I had to wait 40 days for this trade to come to me.
In the screenshot of SFIX above, I started looking for an entry as price faded down to the Daily 50 SMA, about 1/2/20. This is because the Moxie Indicator was still positive over zero, therefore price was likely to bounce off the 50 SMA or eventually shoot back up if it dipped below that MA.
So I waited.
As the days passed, I finally started to see the signs of the setup in the chart above: Positive Moxie Divergence. This divergence told me that momentum and energy was starting to change to the upside. Then the first explosive move occured as price crossed the hourly 50 SMA. But I still didn’t take it. Why? Because I saw that there was a significant MA overhead that was likely to cause a problem.
So I waited.
At this point, I am waiting for price to use the hourly 50 SMA to push it up past that overhead resistance. But how do we know when that is at exactly the right time? Well, you wait for the trade to come to you, and give you all the signs you want for the entry.
That final signal I was looking for was the proof that price had turned around from hitting that over head resistance. That proof was when price got over the 15 min 50 SMA and then tested it for support. Once that event occured all three time frames spoke in unison and said “the trade is here”. This was yesterday, 2/10/20.
And so I acted.