As a trader nothing drive u more crazy then whipsaws. The two charts I’ve included below are whipsaw action I’ve experienced recently. One way I cut down on whipsaws is understanding micro market structure. Bdcl issued a buy signal with price closing above the moving averages and the 5 ema closong above the 20 sma. The very next day price reversed.
When this happens I look back in time to the nearest point of market structure.
Another words I find the pivot point. The low points used to draw trend line. That is the point where u have to cut lose the long trade before the loss punches you in the face.
Moving averages cross because of indecision not decisions. Bulls and bears fighting for control. Its turmoil not trendy action. For you the trader it might seem like it is a decision for direction but reality is moving averages cross because of indecision.
Learn to read the moving averages but don’t forget market structure. Study support and resistance and trend line placement to get a solid understanding of market structure.
So even though this chart is on a sell signal I am still long. I am still long because the day after the buy signal was issued price reversed. In that situation we need to give price room to move around and make it commit to a direction. Understanding market structure helps us avoid whipsaws and not overthink the trade.