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Day 5, 9/14/05 Illustration 6.64
At the end of Day 4, we find that the ACC is now showing two consecutive red bars. It has also crossed the
zero line from positive to negative, indicating that the speed of upward price movement is continuing to slow
down. In addition, while the MO remains above zero, it is also showing a second consecutive red bar,
indicating further weakening of the momentum. However, the value of the MO signal line is still lower than the
value of the histogram bars. Thus, a change in overall direction is not yet indicated. However, the ACC has
crossed the zero line, requiring us to observe stop loss rule #5, and move our stop loss point to the Safety
Line. The Safety Line’s current value is 455.70. Therefore, we will use 455.70 as our trailing stop loss (red “x”),
and will follow the Safety Line until we are stopped out.
Illustration 6.64. Long futures trade with Fractal entry. (GCG6 – Feb ’06 Gold, 6/28/05-9/14/05).
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