Hiya @tommor
Thnx. Why EMA, why 20 and 50? How this calculation made up initially, on what base?
Thnx
I really believe EMA or SMA makes no difference, both do the job. The crossover point isnât a signal in itself, which is good as this can vary significantly between EMA and SMA pairs. Rather it is the condition of the MAâs which is a set-up indicator - if the short average is above the longer average and the longer average is sloping upwards, its hard to think this can be anything else but an uptrend, except maybe for a very transient adjustment period. But I donât us e the 20/50 crossover as an entry signal, rather as a âwatch-listâ signal.
20 and 50 are not powerful numbers as such, the time periods suit my trade style, which is long-term - long enough that the previous 20-50 days are a guide, but the previous 100-200 days are too far back.
Using a pair of MAâs in this way, the long should be 2 or 3 times longer than the short for this sort of set-up purpose.
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Yes, thatâs how it is.
This is a great question actually. There is no way to be completely certain, but with a combination of a good technical ( including RSI and other statistical measures) and fundamental analysis a significant indication can be spotted on time.
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Personally, I do not believe in any of the indicators. They can always go either way. Even the MA that seem to be the simplest may attempt crossing only to go the reverse direction. Iâve tried to follow the likes of RSI, Stochastics, ADX without success cos they ainât always reliable.
However, I consider Support & Resistance very useful, as well as Pivot points.
If price approaches S/R lines or Pivot points, you might wanna analyse it at that point, lock in profit or atleast use trailing stop
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Sure I agree wit Drabah, Using Resistance and Support zones can help you and you have to add it with Chart Failure swing method reading. Apply regression line if it breaks the zone then that trend your following is over, of-course you will also read price action reversal signals in these zone to give you confirmation like a Doji or Morning star, Hammer/Shooting star, Bearish Engulfing/Bullish engulfing, tweezers tops/Bottoms inside Bar formation to name but a few.in these way it gives clear direction in price action, though you have to Spice it with sentiment in the market and Fundamentals.
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All good comments especially mine above, but lets keep in mind that trades start at the bottom. If your comparing two different time slices they should not be more than 4 slices apart, sy 1H and 4H, so you look up for confirmation of your trend and down for is it changing.
Perhaps couples with a CCI momentum oscillator looking down could be a strong confirmation especially if the lower chart moves 10 bars.
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yeah its easy, ma crossover 20, 100 buy on the cross⌠worked for me the past 2 weeks⌠iâm kidding of course.
Although there is no way to be 100% certain, technical analysis and moving averages can help us detect the end of trends. And sometimes by studying the price action and reversal patterns we get a picture of the trend in our mind over the time by experience.
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