About mid morning today, the 10 year US Bond gave a good potential trade signal.

Our Stochastic oscillator system sounded a buy alert on our primary intra-day chart – a 25,000 ticks per bar chart, shown in Figure 1.

Figure 1 GPDUSB 5000 Ticks per Bar

Because of the volatility in this market we moved to our secondary chart – of 2,500 ticks per bar – to see if we could construct a trade. On that chart – shown in Figure 2 – we noted at the 10:17 bar the following:

The MACD Histogram shows a possible trend reversal, AND;

Our Stochastic oscillator system indicates a possible trend reversal, AND;

Our RMI shows a potentially strong trend reversal, SO;

Figure 2 USDGBP 500 Ticks per Bar

We go long at the opening price at the 10:26 bar at about 1.52208.

Our profit target is the SRV line at 1.52670 – about 462 pips.

Our initial stop will be about 50 ticks below our entry.

Our trailing stop will be a two bar reversal of the RMI on our trade construction chart.

Obviously this trade went well. Our exit was a two bar revesral of the RMI which occurred at the 15:00 bar – with a closing price of about 1.52606 – not far below our target price of 1.52670.

Not all TBL trades go this well, but a fair number usually do – especially for the trader with the patience to wait for the proper setup.


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