( quick tp of +60) week32 DAX30 mean reversion trade

Early part of day , JPY crosses were plunging.

Nikkei was down by a lot.

By afternoon, indices opened with a gap down.
After I woke up from nap, I check the flying buddha and found a possible trade for mean reversion on Dax.

D1

From historical charts price is reaching d1 line chart support as well.
When price is too far away from the EMA , it has tendency to move back to rejoin it. Say for bearish situation, should the day start with bearish down move, by later session it will hv reached a key support n possibly overextended. A long from there will see a very quick move and hence I look to capitalize on this mean reversion movement. Done correctly, the result on occasion will a be daily hammer print which may herald the start of a new uptrend.

week32 DAX30 D1 mean reversion 080814

h1

I also looking for intraday macd divergence to signify a possibly of momentum change to confluence in mean reversion.
When put together with price reaching a very strong support, this confluence add strength to a quick bounce and hence a fade back to the mean.

week32 DAX30 h1 mean reversion trade 080814

Weakness

One weakness of this will be not able to find a solid place to place my SL. Playing this mean reversion trade is trying to catch a falling knife. Done wrong and it can be messy. Done right and quick profits can be seen.

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