Lately I have been trying to work on a method of trading that combines traditional price action analysis with technical indicators with a touch of Elders triple screen method. Really I am still paying around with ideas.
One idea that I have seemed to embrace is using three EMAs (I'm using EMAs of 8,18 & 24 in combination with an occilator indicator). In particular I am interested in their (I want to use the word 'convergence' but don't want to get this confused with MACD) union. Note that this is not a three MA crossover method.
I find that whenever all three EMAs join together in a trading range, it is highly likely that a trending move will break out. Once price breaks out in a trending move, the EMAs will seperate. As price makes retracements or corrections, either two or all three of the EMAs will connect, making great entry points in existing trends (often a good entry point is when the 8 & 18 EMA will touch and price will respect the 24 EMA).
This combined with an occilator indicator (I use RSI as its simple) is so far giving fairly reliable signals. Just wondering if anybody can maybe who has worked with or on a simmilar method can add their two cents, such as flaws, observations, exit strategies, etc. Like I said, this is just an idea that I am toying with, but really want to develop.
One idea that I have seemed to embrace is using three EMAs (I'm using EMAs of 8,18 & 24 in combination with an occilator indicator). In particular I am interested in their (I want to use the word 'convergence' but don't want to get this confused with MACD) union. Note that this is not a three MA crossover method.
I find that whenever all three EMAs join together in a trading range, it is highly likely that a trending move will break out. Once price breaks out in a trending move, the EMAs will seperate. As price makes retracements or corrections, either two or all three of the EMAs will connect, making great entry points in existing trends (often a good entry point is when the 8 & 18 EMA will touch and price will respect the 24 EMA).
This combined with an occilator indicator (I use RSI as its simple) is so far giving fairly reliable signals. Just wondering if anybody can maybe who has worked with or on a simmilar method can add their two cents, such as flaws, observations, exit strategies, etc. Like I said, this is just an idea that I am toying with, but really want to develop.
