Hello all,
Something I have noticed is that when price is crossing the 20 EMA on the bigger timeframe (which in my case is the 30 minute) it is unclear the direction will be even if price is currently on one of the sides.
Yes, certainly. (Why would that be clear?).
Statistically, though, as Brooks, Volman and others have commented, if the price is comfortably above a rising 20-bar MA, the probability of the next few bars having a net upward movement is a little more than 50%, and the opposite when it’s comfortably below a falling 20-bar MA.
Whether the MA is clearly rising/falling is at least as important as whether the price is above/below it, I think?
But even that, as far as I know, that doesn’t in itself confer a tradable edge. Why would it? A moving average is only a historical construct, after all.
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I believe Volman was using 25 EMA, but close enough. As for Brooks I have gone through nearly all his course and have adopted his 20 EMA in my trading together with Alex Elder’s multi timeframe analysis.
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