How to Avoid Making Bad Trade by Using 3SMA Trend Surfing Technique

I was caught short on GBP/USD from 1.9630 level (x3) since yesterday. In 24 hours time, the GBP/USD market moved from a swing low of 1.9500 to a swing high of 1.9850, a massive upside movement of 350 pips. I was unable to identify my mistakes at that time as the market continued to act against my positions.

This kind of unusual move is very detrimental to trading. When holding your positions against the trend with no stop limits and no backup trading plan, it could easily wipe your account slate clean. So, a lesson learned here.

I did a post-analysis of what went wrong yesterday. To troubleshoot, I strapped my M5 trade entry chart with 3SMA trend lines and also the associated trend filter indicator, courtesy of Hector's trading system. To further improve my trading skills, I recently exchanged emails with him on various trade ideas (I'll do some postings on that later) after studying his 3SMA course.

Here is how the 3SMA could help. It is important to note that the core concepts of 3SMA trading technique are identifying pattern breakouts and TREND SURFING.


Figure: Soon after my short entry at 1.9630, the 3SMA long setup appeared at least two times (see the marked circles inside the chart).

If you have been following Hector's trading video, you will know that the price was supported at the 3SMA dynamic region before bouncing off to a new swing high for a valid price pattern breakout. These 3SMA setups could therefore be very useful to serve as warnings if you are holding shorts; or better, to be used for long entries if you prepare to enter the market.

After this experience, I decided to practise the 3SMA technique frequently and suggest you to do the same by making use of this approach. The trading course is quite an expensive one (comes with money-back guarantee), but well worth it. In the long run, the course should help us avoid making rogue trades by increasing our trading awareness. With continuous trading support and through more practices, hopefully we can get rid of all our trading mistakes by becoming a better market observer and a safer trader.