20 EMA and Patterns

[Shamal 11]

Great thread, BB and BF, simple setup and very effective.

Could you talk something about stop levels and managing trade.

Suppose managing trade would be to keep with the trend of 20ema.

[Bearbull 10]

Great thread, BB and BF, simple setup and very effective.

Could you talk something about stop levels and managing trade.

Suppose managing trade would be to keep with the trend of 20ema.

 

The stop loss is dependent on your risk tolerance and account size., also the timeframe on which you are trading.

The logical stop would be a couple of ticks below the hammer (for long trades) and vice versa. As for trade management you could achieve that via a number of ways i.e trendlines (wyckoff way), stay with the moving average, or move stop beneath each bar that moves in your favor, so in a long trade, do not be freaked out by a retracing bar and move stop under that, it will be most likely get hit prior to prices moving up. However all this has to be tested out , key is to keep losses to minimum and let profits run, easier said than done;)

[Bearbull 10]

BF,

Prices have been taken down on the Globex, wonder if this is market manipulation prior to rollover , when under normal conditions, the market turns bullish.

[brownsfan019 17]

BF,

Prices have been taken down on the Globex, wonder if this is market manipulation prior to rollover , when under normal conditions, the market turns bullish.

 

Crashed right through. Never got any bullish signal, so that is good. Didn't stay above that 20 EMA for long though. Interesting to see how this will play out.

[stalor455 10]

Great thread guys, Here's kinda what I do,,, I use a 21 pivot point (H+L+C)/3 sma on my 5 min mostly for the entry, I watch a 7,000 vol chart with the same 21 pp sma & an 8ema, for the different perspective a vol chart shows,& the 8ema is respected by ES on a 7k vol ch, I hold the position as long as price doesn't violate the 21 ma on the 7k vol chart..that combined with the 1 minuite volume bars tell me the end of a move is likely. That's just a lil method I came up with after reading John Carter's book & John Persons pivot point & candle triggers, it's simple & works for me, but everyone trades a different way. ST

 

A 3 minuite chart with a 34 pp sma is almost identical to the 21 ma on a 5 minuite, but the 3 min gives different candle patterns!

[brownsfan019 17]

Pictures please!

 

[stalor455 10]

This is 6765 vol ch with a 21 ema set to "pivot point" not close, n red, an 8 pp ema n blue. An indicator at the bottom green, means a candle closed above the 21, red vice versa. Like all tools you have to watch them a while & learn how they react & look n different situations, sometimes I let price come back to the 8 or let the 8 to cross the 21 for entry or exit depending on where supp & resis is & market internals, notice during lunch doldrums tall sloppy choppy bars, but when volume picks up and a move happens you get a cleaner looking move, it's easier for me to stay in a move longer with this type of chart & ma set up vs a time chart. But I'm not a scalper, I trade 2-3 times a day & go for larger moves. Once the holidays are over & volume gets back to normal, the 7K or the "6765 fib#" vol ch will make a prettier cleaner chart than shown here. Hope this helps someone....ST

[stalor455 10]

5 min ch, same day as above same 21pp ema

[phoenix01 10]

Is anyone still using the 20 ema successful? Ive had quiet good success and was wondering how people had deveopled their systems.

[brownsfan019 17]

Is anyone still using the 20 ema successful? Ive had quiet good success and was wondering how people had deveopled their systems.

 

The 20 EMA seems to be a popular tool. Since this thread was started, I've noticed it's use on a few forums.

 

Feel free to get it going again w/ your screenshots! Best way to get people posting is w/ pictures.

 

[phoenix01 10]

Right well i will show you two examples of successful trades that i took last week. Now they show that ema is excellent and we should all be making huge amounts of money using simple tools. Nice strong trend, followed by weak pullbacks and perfect candles off the line (sometimes even two).

 

 

 

However the problem lies when you have days like this. The market is giving off signals on both sides of the line. Most people will instantly say "oh its a conslidation day you shouldnt be trading" but you dont know that by the middle of the day.

 

(Dont worry about the orange line its just another average iam testing)

 

Do people have any advice on this problem because its causing me to lose most of the money i make on trades like the first two. I have not found any indicators that will help me filter trades or to avoid range days. The only small break through i have made is identify the range and once one trade fails inside, you dont take another one till it breakout. Is it something i can not avoid at all and just have to take the loses. Advice would be much apprecitated. (Sorry if the pictures are too large this is my first post on this website).

 

Omar

[brownsfan019 17]

Phoenix - I think the devils in the details. It's how you define what a pullback is. On your chart that was a bit choppy, were there clean pullbacks? I define a clean pullback as one where there is 'white space' on my chart. I want to see price push off the MA and then re-test it. I would not want price just resting on it. Yellow highlight is the push that I would be looking for - same premise as when this thread started in 2008.

 

 

 

 

You might say, but --- we only had 1 really nice trade, 1 ok trade and 1 loser though! Well, that's trading in a nutshell. No method will be perfect every day, your goal is to find something that consistently puts money in your pocket.

[phoenix01 10]

I think the white space idea is a really good way to filter out bad trades. Gives you something to actually look for when there are so many variations of pullbacks.

 

Here is some recent price action, i thought we should dicuss some difficult setups instead of posting simple ones.

 

 

The first trade i hesitated for some reason, maybe due to the size of the wick and being at the top of the range. Also iam not seeing any white space or is there? However in hindsight it was the best trade of the day, strong up move followed by a strong rejection of the ema. And the second trade was a mistake trying to sell a pullback after a big move down and there is big rejection just before. Interested what you think about the two trades.

[brownsfan019 17]

1 - looks good.

2 - depends how you define, it never touched the EMA if that's the black one on your chart.

 

What instrument / timeframe are you using?

[zdo 20]

I’m looking at this thread in relation to my questions in the http://www.traderslaboratory.com/forums/technical-analysis/10474-your-mean.html thread.

BF, phoenix01, et al. When / on which bar are you executing these trades? Thanks

[brownsfan019 17]

I’m looking at this thread in relation to my questions in the http://www.traderslaboratory.com/forums/technical-analysis/10474-your-mean.html thread.

BF, phoenix01, et al. When / on which bar are you executing these trades? Thanks

 

ZDO - in what has been posted here, I would say the entry options are:

 

1) Enter w/ a limit order @ EMA

2) Enter on the close of bar that gets back to EMA

3) Enter 1 tick above/below entry bar at the EMA

 

Good and bad of each entry method obviously. #1 will be great when the trade does hold and produces entries for #2 and #3. #2 gives you some additional confirmation and #3 has you buying into strength and selling into weakness.

 

Small stop on #1, average stop #2, and largest stop #3. There's a thread around here that I posted awhile back about entry methods I've looked at.

[ake 10]

However the problem lies when you have days like this. The market is giving off signals on both sides of the line.

 

Do people have any advice on this problem because its causing me to lose most of the money i make on trades like the first two. I have not found any indicators that will help me filter trades or to avoid range days.

Omar

 

Phoenix, you may want to consider taking only the pullbacks and rallies that follow an A-B-C move up or down.

 

A-B-C moves tend to happen in trending markets or markets that are starting to trend and are less likely in range bound ones.

 

Filtering trades this way might help you avoid low probability signals.

 

Good trading!

[phoenix01 10]

Phoenix, you may want to consider taking only the pullbacks and rallies that follow an A-B-C move up or down.

 

A-B-C moves tend to happen in trending markets or markets that are starting to trend and are less likely in range bound ones.

 

Filtering trades this way might help you avoid low probability signals.

 

Good trading!

 

Yeah I think that's the best way to do it, that's when the setup has the highiest probability of success. However that would mean I would have to watch 2-3 markets to find the trending one if I want at least one setup a day. Indices like the ES can range for two three days in a row. I know the setup quiet well so do people think that's a wise move or just trade the one market? I think it would suit me trading 2-3 markets because I get drawn in if Iam only staring at one chart all day and its ranging.

[phoenix01 10]

I’m looking at this thread in relation to my questions in the http://www.traderslaboratory.com/forums/technical-analysis/10474-your-mean.html thread.

BF, phoenix01, et al. When / on which bar are you executing these trades? Thanks

 

Iam entering them when the bar closes. I wish I knew the setup well enough to just enter on the ema but I think its possible once you traded the setup long enough. It would give you excellent risk to reward ratio and a real edge.

[brownsfan019 17]

Yeah I think that's the best way to do it, that's when the setup has the highiest probability of success. However that would mean I would have to watch 2-3 markets to find the trending one if I want at least one setup a day. Indices like the ES can range for two three days in a row. I know the setup quiet well so do people think that's a wise move or just trade the one market? I think it would suit me trading 2-3 markets because I get drawn in if Iam only staring at one chart all day and its ranging.

 

I think it depends on a few things:

 

1) What timeframe(s) are you using?

2) How many markets can you watch w/o a problem?

3) How many trades per day do you want?

 

If trading say the 5 min chart, you are going to have limited trades by default on 1 market. But you could easily watch 1-4 markets on the a 5 min chart I'd say, especially if you set alerts on your chart.

 

On the flip side, if you are using a 1min or quick volume/tick chart, it could be hard to watch more than 1 or 2.

[brownsfan019 17]

Iam entering them when the bar closes. I wish I knew the setup well enough to just enter on the ema but I think its possible once you traded the setup long enough. It would give you excellent risk to reward ratio and a real edge.

 

This post discusses a strategy of entering in anticipation of a 20EMA test. Takes some fortitude to be buying when it's coming against you in anticipation that the 20EMA traders will prop it back up - when works, you will get optimal entry points. Just have to be prepared for when price blows through the 20EMA.

[brownsfan019 17]

Here's a 5min ES chart today with 20 EMA. Anything stand out?

 

 

 

 

BTW - YM, NQ and RLM had their own trades as well. 4 indexes, 5min charts, not too bad I'd say. While they are indexes, the chart output can differ.

[ake 10]

Yeah I think that's the best way to do it, that's when the setup has the highiest probability of success. However that would mean I would have to watch 2-3 markets to find the trending one if I want at least one setup a day. Indices like the ES can range for two three days in a row. I know the setup quiet well so do people think that's a wise move or just trade the one market? I think it would suit me trading 2-3 markets because I get drawn in if Iam only staring at one chart all day and its ranging.

 

Either more markets or single market, multiple timeframes. Many traders focus on a single market and know its rhythms and nuances well.

 

The challenge with fast timeframes, like 1 minute, is likely to be to manage your orders, particularly if, for instance, you want to enter long with a stop a tick above the signal bar's high and the signal bar closed at the top of its range.

 

In that case, --and also if you prefer to enter with a limit order at the EMA--, it might be helpful to enter your orders soon after the retracement starts and keep them a certain distance away until price pierces the EMA, then move them as needed.

[JMC 10]

Glad to see this thread is active again. I mainly trade CL and TF and use the 20 EMA (use a 100 EMA on the 1minute time frame) as my primary tool for trading. I've come to prefer actually entering at the EMA and managing from there. It seems to work great on most futures contracts. Here's a screenshot of the 1 minute chart of Gold this morning. Perfect textbook trend day movement with a nice $13 bounce off of the EMA around 8:20 AM EST.

 

[joshdance 10]

However the problem lies when you have days like this. The market is giving off signals on both sides of the line. Most people will instantly say "oh its a conslidation day you shouldnt be trading" but you dont know that by the middle of the day.

 

Omar, the solution to this problem is simple--WAIT until the trend is established. If you don't know if the trend is strong, then it's not. Say you woke up to this chart, as I did this morning. Would you call this an established trend? Or to put it differently, would you looking to be shorting this, rather than longing this?