20 EMA and Patterns

[brownsfan019 17]

And another:

 

 

 

I know those might not meet BB's criteria, but I see two possible opportunities to get short based on candle patterns, but not necessarily hammers/inv hammers.

 

Looks like it did well overall today. Any of you guys trade these live? I was just a spectator today.

[brownsfan019 17]

So the question going forward (for me at least) would be - how does this hold up during 'normal' market conditions? We saw a huge move today, which might explain the reason for amount of trades also available utilizing the 20 EMA and our 'pullback' to the MA.

[Bearbull 10]

BF,

The 2 setups I mentioned are not my criteria, they were highlighted for the benefit of Robinhood in the previous thread to experiment with and via his own research ascertain the level of predictability on a single time frame. The intention was to point out to him that in the right context, candlestick charting does have a value in intraday trading.

 

An edge is not something which works by itself, the trader has to develop the skills to make it work;)

[Bearbull 10]

Believe it or not. Price action around 5-min and 15-min 20EMA and the Bollinger Band during early hours can be your clue to whether or we may have a Trend Day.

 

How about illustrating with concrete realtime examples.

[brownsfan019 17]

We have a pre-market one working currently:

 

[brownsfan019 17]

Nice early morning drop here. I would say the initial trade worked or was stopped depending on stop placement. If stopped, a re-entry may have been valid. That part depends on the money management aspect of the system.

[brownsfan019 17]

And into a buy it looks like:

 

[brutusdog 10]

Nice early morning drop here. I would say the initial trade worked or was stopped depending on stop placement. If stopped, a re-entry may have been valid. That part depends on the money management aspect of the system.

 

it would be interesting to hear how different traders would enter these trades....

 

i assume the traditional would be to enter on a break past the pin/spinner with a stop past the high/low of the bar. however this might be impractical in terms of r/r....also there is the issue of when to exit at a fixed point or to close 1 lot at a fixed target and run the remainder with a trailing stop at the 9 or 20 ema.

 

:missy:

[james_gsx 16]

it would be interesting to hear how different traders would enter these trades....

 

i assume the traditional would be to enter on a break past the pin/spinner with a stop past the high/low of the bar. however this might be impractical in terms of r/r....also there is the issue of when to exit at a fixed point or to close 1 lot at a fixed target and run the remainder with a trailing stop at the 9 or 20 ema.

 

:missy:

 

It really depends on your risk management. There are a several ways to enter, and it all comes down to how much risk you want to expose.

 

1 - Enter right at the EMA

2 - Wait for the candle to "close" and enter immediately

3 - Enter just before the candle closes

4 - Wait for confirmation, whatever that may be.

 

The exits are the tricky part. Since candlesticks are so discretionary, this part can be difficult for some. I know setting fixed targets can work really well, but sometimes that can cause you to miss out on some of the bigger runs. The use of BB bands was brought up, and I think there should be another thread for that, but it's certainly one way to help plan an exit strategy.

[james_gsx 16]

I thought this was interesting, and worth sharing.

 

On the 15min, price crossed above the 21 EMA and made 4 spinning tops all using the 21 EMA as support. But if you look at the previous retrace in the pre-market action then you can see a resistance cluster. After the WRB the spinning tops clearly showed indecision, and I would have been more concerned with the fact that price couldn't clear the resistance. Shortly after, two WRBs completely wiped out the first once and we made new lows for the day into the close.

 

[brownsfan019 17]

Couple nice ones this morning:

 

[MC 10]

I thought this was interesting, and worth sharing.

 

On the 15min, price crossed above the 21 EMA and made 4 spinning tops all using the 21 EMA as support. But if you look at the previous retrace in the pre-market action then you can see a resistance cluster. After the WRB the spinning tops clearly showed indecision, and I would have been more concerned with the fact that price couldn't clear the resistance. Shortly after, two WRBs completely wiped out the first once and we made new lows for the day into the close.

 

 

This same day I was tinkering with the EMA setup and saw that S&R cluster.

I'm on paper and tried a sim trade with the EMA over the market structure. Big mistake...lesson learned. IMO market structure > arbitrary levels.

[MC 10]

And into a buy it looks like:

 

 

I wouldn't see that as a clean test of the EMA and a bit of a stretch. It went on to close below the EMA. Naked candles based on the market structure it was maybe a fair long attempt but not off the EMA setup. JMHO

[brownsfan019 17]

I wouldn't see that as a clean test of the EMA and a bit of a stretch. It went on to close below the EMA. Naked candles based on the market structure it was maybe a fair long attempt but not off the EMA setup. JMHO

 

I see a hammer @ the EMA. My version of this idea is rather simple - candle pattern @ EMA after a retest/pullback. Key being the pullback part.

[brownsfan019 17]

Pre-market action this morning:

 

 

 

 

Trade 1: decent move.

 

Trade 2: wow. nice.

[Bearbull 10]

Well BF, it is the same drill, having patience to wait for the setup and discipline to act without hesitation, but first have to do the required research and verify for yourself the risk/reward, probability etc, have not heard from Robinhood for whom the effort was made in the first place. Well you can take a horse to the pond, can't make him drink;)

[brownsfan019 17]

I was looking as well BB:

 

 

[brownsfan019 17]

I know there are others learning from this so even if the intended person is not reading, many others are.

 

There's a valid entry signal setup here. From there it's up to the individual person to figure out where, how and when to exit. Easier said than done.

[brownsfan019 17]

This morning. I see two (one pre-market).

 

[brownsfan019 17]

BB - what do you think of the 2nd arrow? It got through the EMA but gave an inv hammer. Would you consider a short there or no b/c it busted the EMA?

 

[MC 10]

BB - what do you think of the 2nd arrow? It got through the EMA but gave an inv hammer. Would you consider a short there or no b/c it busted the EMA?

 

 

You didn't ask me but the fact it didn't hold would kill it for me. Add to that how flat the ema is and there's no trend left to track with that ema.

 

JMHO

[Bearbull 10]

BF,

It is strictly not an ideal setup in the initial stages of evaluation of the 2 setups mentioned earlier. After a trader has gone through the research process and gained experience, then other tools can be introduced such as support/resistance, vol etc, to consider it as a viable opportunity.

 

e.g 1. The previous support around 1215 was decisively broken by the 10.45bar(vol ~35K) and is now acting as resistance as evidenced by a clear rejection of the price around the midpoint of that bar, by the inverted hammer( Vol ~37K) that you have arrowed.

 

2. Secondly, the volume on that inverted hammer is also greater (around 37k) than one higher up (1222, 32K) which exhibited a double top formation suggesting increasing selling pressure.

[Bearbull 10]

With patience, much better setup compared to the previous one prior to lunch,

 

Here the big boys are back, decisive move up after a double bottom formation, testing on low vol, with a classic hammer and a clear target, a previous broken support.

[brutusdog 10]

I was looking as well BB:

 

 

 

what about the bar 3 bars prior to the down arrow you marked.....a valid short entry?

[daedalus 10]

This is a great thread guys. Its much appreciated! Please keep it coming. I've been lurking in this thread for a couple weeks and even though I don't post I just want you to know the content is appreciated!

 

Guys have any tips on initial stop placements? Management?