Entry Rule

Traders get a long or short signal if the swing size is broken by the daily close (on daily data). There are many ways in practical trading to modify this approach, but the concept remains unchanged throughout our analysis.

As we demonstrate on computer test runs later on, this approach is profitable over time.

Figure 4.2 shows the entry rule for buying and selling.

Figure 4.2 Entry rule.

In addition to entry rules that can help traders track changing markets, reliable stop-loss exit rules can help them control risk in their positions.

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