Trade Setups - Higher Low Setup

Example chart above:Bank Nifty 30 min chart

Higher Low Setup / Retest of Lower Median Line

This is a classic setup of median line system.The rules are my own.

Rules for this Setup

• Identify a downswing, a counter upswing and again a pullback.Draw a Median line set with prev Major three swing pivots ( P3 will be end of the downswing or viceversa)
• Wait for the price to test the LML and move upwards.
• When price crossed 50 % of the pullback which tested the LML Buy position entered.If the price crosses 50 sma it adds to the positiveness of the trade.
• Stoploss will be below the test bar low or low of bar below 50 sma.
• Targets will be 1.Median Line meet of price, 2. Previous Swing high for Long positions / Low for Short positions , 3. Upper Median Line / Lower median line.
• Trailing profits with 5 ema / 10 ema or 5/ 20 ema crossover.

Update on 25.01.11

The prices met with resistance at the previous swing high.On 5-20 ema crossover the long position closed.

Took add position at 11,100 levels at expected median line support which was stopped out at stoploss level of 11,000.The support levels to be watched for price action for next move.