If you had absolutely nothing on that chart besides the MA, you can trade textbook PA. Price breaks out of the range (flat MA) to the upside, you're long on the break. Price normally completes two more pushes up from the breakout push before a true trend reversal (breakout through the other side of the MA). There were a couple scalpable short signals off the 2nd push, first a false breakout and then a lower high, scalpable to the MA and lower if broken, which it wasn't, so the uptrend is still intact and now there's short fuel for the next push up. Third push pulls back and closes beneath the MA for the first time, short signal, confirmed further by the lower high on failed bounce. No other indicators needed to trade those moves.
Agreed, I did make a mental note of the 5 wave structure after the breakout. When you say the second push, do you mean corrective wave 2? or do you mean the 2nd impulse wave (wave 3), not sure I see your short signals, unless you are talking about very quick scalps. I've attached a chart of the same security, on the same afternoon but on a smaller time frame. Notice how the break in support on the momentum indicator (support from the previous flat range) coincides exactly with the break and close below of the MA (20 EMA). This would have given confirmation of the change in trend before the lower high.
Normally when I say a "push" or a "leg" in a trend it's off a pivot low or pivot high from which the new trend originated. The first push might be nothing more than a pullback in the trend-in-progress, but if that results in a first HL/LH or a DB/DT or a failed break through previous S/R, and then continues in the new direction, then it's the first push in the new trend. On your chart I had no idea what came before the range, so I considered the break out of the range the first push. The short signals were indeed counter-trend scalps, but always with an eye on potential trend reversal especially off the first LH. I will sometimes put on an aggressive entry counter-trend trade when price stalls or pulls back a bit on a third push because the risk is so small ($50-$70 risked), the scalp is decent (min $200) and many times a strong reversal ensues. But I definitely prefer entries that are confirmed by the price action.
That's definitely intriguing. Is that pretty consistent pattern and is it easy to "see" in real time?
I will be testing it this week, will of course let you know it's reliability... I guess you could say Momentum on FX is like a substitute for Volume, at least that's my current thinking.