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28  Figure 10
suiss ma: ZS5 cma 77sb F 7684 7?.....lfns/ /- 73iz T.ibb. 7019 6874 6728 6582 6436 6290 /t Figure 11a british poun ha: 2S.S CMA 18658 j 18394 18138 17882 17370 16858 16601 .............ft 16345 16090  Figure 1 lb Now, I want to get back to some serious trading. Lxiok at Figures 11a, lib. The offset MA gave excellent visual containment of the price action, and the trades were able to be optimized by getting out of them when the ciose penetrated the MA. Looking back at Figure 10, its possible to see that exiting the bond trade on a close under the MA would have gotten me out approximately where got me out.
Trading By The Book - Part 11 TBONDS 8712 8526 8488 8223 B1B5 7319 7B81 7615 7429 7311 7125 prices closed at the anticipated expa«sio« close outside qF the envelcpe on next day  an a-b-c swinff consists of two legs, A-b And l>-c Figure 12 shows the breakout from the i-ll-ll! high (labeled a-b-c for purposes of the next paragraph). My sell stop was at 84-24 which is one tick below the #ii point. The next day prices move down, and my order is filled. It is also a penetration of the MA shown in Figure 10. That penetration helps me to have the courage of my conviction for entering the trade. The next day prices move on out of the envelope which further convinces me of the momentum behind this move. However, after two days of movement this explosive, I will be cautious with my stops. Why? Because some sort of retracement can be expected that will give a better opportunity to again enter this market to the short side. When a market breaks from a congestion, I can expect it to move to a distance that is a 1.00 projection of the latest a,b,c swing [(b - a) + ]...remember the Gold trade in Part I. That swing is shown in Figure 12. Im going to increase the chart sizes so that its easier to see what Im talking about as the trades progress. What kind of a retracement am 1 looking for? Remember the Gold trade in Part t -Im looking for a .382 or a .618 retracement of the a-b leg of the swing that carried the breakout, from the high of the leg to the low of the leg.
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