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Study Guide for Come Into My Trading Room - Forex Factory

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176 CASE STUDIES<br />

Trade 4: Imclone Systems IMCL—Entry Answer<br />

IMCL: A Steady Trend Against a Pervasive Enemy<br />

Chart A4-a<br />

A key principle of the Triple Screen trading system is to make strategic<br />

decisions on long-term charts, and then turn to short-term charts <strong>for</strong> tactical<br />

decisions about entries and exits. The weekly chart of IMCL shows<br />

a series of slow and steady swings, each lasting several months. If we<br />

can get in gear with an upswing, we should trade from the long side as<br />

long as it continues. If we get in gear with a downswing, we can continue<br />

shorting <strong>for</strong> as long as that downmove stays in <strong>for</strong>ce.<br />

At the right edge of the weekly chart, in area A, both weekly EMAs<br />

have turned up, giving buy signals. At the same time, MACD-Histogram<br />

has ticked up, rein<strong>for</strong>cing the bullish message (this is an Impulse System<br />

buy—both the EMA and MACD-Histogram point higher).<br />

IMCL has been stuck in a flat trading range <strong>for</strong> the past two months.<br />

The bottoms of MACD-Histogram have become shallow, showing that<br />

bears are becoming weaker. Bulls, at the same time, have maintained<br />

their strength—the rallies of MACD-Histogram above its centerline have<br />

been rising to the same level during those two months. As prices push<br />

higher, toward overhead resistance near the right edge, Force Index<br />

A

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