The procedure here is to plot 4 lines on your Meta trader platform. Two 89 EMA and two 144 EMA lines. The steps are;
Go to your indicator, choose moving average and fill in the following parameters;
(i) Period – 89 shift – 0
MA method – Exponential
Apply to – high
Style – e.g. white.
(ii) Period – 89 shift – 0
MA method – Exponential
Apply to – low
Style – still white.
(iii) Period – 144 shift – 0
MA method – Exponential
Apply to – high
Style – e.g. yellow.
(iv) Period – 144 shift – 0
MA method – Exponential
Apply to – low
Style – still yellow.
BUYwhen the two 89 EMA line immediately crosses above the two 144 EMA line. Should you were not there at the crossover and you perhaps meet the market when the two 89 EMA are still up, this still means that the buyers are still in control, then you should think more of buying. However, a disadvantage here is that you do not know if you will be entering at the end of the trend.
SELL when the two 144 EMA line immediately crosses above the two 89 EMA line. Should you were not there at the crossover and you perhaps meet the market when the two 144 EMA are still up, this still means that the sellers are still in control, then you should think more of selling. However, a disadvantage here is that you do not know if you will be entering at the end of the trend.
Things to note
1. The signal here is to be strictly followed using the 1 min time frame. 5 min can either support it or be used for swing trading.
2. This indicator is best for generally volatile currency pairs e.g. all yen pairs, GBPCHF, GBPUSD or any currency pair under a very volatile market condition that last for hours.
3. One on one crossing at times should be followed skeptically, however two on two crossing completely confirms the direction.
4. Whenever the four lines are interwoven, this means that the market is sideways. Hence, you adopt a different trading approach e.g. scalping once or twice maximum.
5. This is a trend indicator just like your MACD. It does not respond to the individual retracements along a trend. A total break out confirms an end to the previous trend.
6. Your candlestick has to be as small as mine, if possible, zoom your chart to lowest. If you are a trader that loves reading candlestick, I believe you should know it’s a nuisance doing on a 1 min chart.
7. Following the signals or using them for your entries are usually very good when you are trading in the direction of the major trend. Well, I believe you know you have to use higher time frames e.g 4hr, Daily to determine direction of major trends. For example presently in the market the major trends for most common pairs is down, you can then use this indicator to know when to sell.
8. This indicator can be very good on a powerfully trending day where the market is powerfully facing a direction. The issue here is it still tells you not to do the otherwise yet if you are a trend trader.
9. This indicator just like others will never tell you the beginning nor the end of a trend Well, I believe only God can.
10. Good for intra-day and swing traders. position traders stay away.
LETS CONSIDER SOME ILLUSTRATIONS
1ST CHART. This is a critical buy situation where the EMA lines are slanting up (buy). Shortly after the white lines crossed above(buy), they were separating farther(hence buy situation becoming stronger). However, if it happens that the distance is becoming closer, it is telling you that an impending takeover of sellers (reversal) could be by the close door.
2ND CHART. This is a critical sell situation where the EMA lines started slanting down after it had been interwoven (sideways). The yellow lines crossed above (sell) and was separating farther, making the sell signal stronger. However, if the separation is becoming thinner, it is telling you that an impending takeover of buyers (reversal) could be imminent.
3RD CHART. This is critical situation of neither buyers nor sellers. It fully shows the market is sideways. The 4 EMA lines are neither slanting up nor down. Hence, the signal given anywhere should not be followed. When I personally sees this I know the market is sideways and if I am sure it will remain sideways (based on fundamentals or no upcoming red news), then I do some bloody scalping of once or twice and get out.
VEHEMENT ADVICE – I strongly do believe you should know that other technicalities such as resistance, supports, pivot point, trend lines, fundamental commentaries, news outcomes should also be applied in your analysis. Hence, you do not solely rely on this indicator.
DISCLAIMER – The writer shall not be liable for any failure that arises in the application of this instrument as it is only a trading suggestion. Hence, if you are a young trader, it is advised you apply the instructions therein on a demo account before you do on a live account.
Go to your indicator, choose moving average and fill in the following parameters;
(i) Period – 89 shift – 0
MA method – Exponential
Apply to – high
Style – e.g. white.
(ii) Period – 89 shift – 0
MA method – Exponential
Apply to – low
Style – still white.
(iii) Period – 144 shift – 0
MA method – Exponential
Apply to – high
Style – e.g. yellow.
(iv) Period – 144 shift – 0
MA method – Exponential
Apply to – low
Style – still yellow.
BUYwhen the two 89 EMA line immediately crosses above the two 144 EMA line. Should you were not there at the crossover and you perhaps meet the market when the two 89 EMA are still up, this still means that the buyers are still in control, then you should think more of buying. However, a disadvantage here is that you do not know if you will be entering at the end of the trend.
SELL when the two 144 EMA line immediately crosses above the two 89 EMA line. Should you were not there at the crossover and you perhaps meet the market when the two 144 EMA are still up, this still means that the sellers are still in control, then you should think more of selling. However, a disadvantage here is that you do not know if you will be entering at the end of the trend.
Things to note
1. The signal here is to be strictly followed using the 1 min time frame. 5 min can either support it or be used for swing trading.
2. This indicator is best for generally volatile currency pairs e.g. all yen pairs, GBPCHF, GBPUSD or any currency pair under a very volatile market condition that last for hours.
3. One on one crossing at times should be followed skeptically, however two on two crossing completely confirms the direction.
4. Whenever the four lines are interwoven, this means that the market is sideways. Hence, you adopt a different trading approach e.g. scalping once or twice maximum.
5. This is a trend indicator just like your MACD. It does not respond to the individual retracements along a trend. A total break out confirms an end to the previous trend.
6. Your candlestick has to be as small as mine, if possible, zoom your chart to lowest. If you are a trader that loves reading candlestick, I believe you should know it’s a nuisance doing on a 1 min chart.
7. Following the signals or using them for your entries are usually very good when you are trading in the direction of the major trend. Well, I believe you know you have to use higher time frames e.g 4hr, Daily to determine direction of major trends. For example presently in the market the major trends for most common pairs is down, you can then use this indicator to know when to sell.
8. This indicator can be very good on a powerfully trending day where the market is powerfully facing a direction. The issue here is it still tells you not to do the otherwise yet if you are a trend trader.
9. This indicator just like others will never tell you the beginning nor the end of a trend Well, I believe only God can.
10. Good for intra-day and swing traders. position traders stay away.
LETS CONSIDER SOME ILLUSTRATIONS
1ST CHART. This is a critical buy situation where the EMA lines are slanting up (buy). Shortly after the white lines crossed above(buy), they were separating farther(hence buy situation becoming stronger). However, if it happens that the distance is becoming closer, it is telling you that an impending takeover of sellers (reversal) could be by the close door.
2ND CHART. This is a critical sell situation where the EMA lines started slanting down after it had been interwoven (sideways). The yellow lines crossed above (sell) and was separating farther, making the sell signal stronger. However, if the separation is becoming thinner, it is telling you that an impending takeover of buyers (reversal) could be imminent.
3RD CHART. This is critical situation of neither buyers nor sellers. It fully shows the market is sideways. The 4 EMA lines are neither slanting up nor down. Hence, the signal given anywhere should not be followed. When I personally sees this I know the market is sideways and if I am sure it will remain sideways (based on fundamentals or no upcoming red news), then I do some bloody scalping of once or twice and get out.
VEHEMENT ADVICE – I strongly do believe you should know that other technicalities such as resistance, supports, pivot point, trend lines, fundamental commentaries, news outcomes should also be applied in your analysis. Hence, you do not solely rely on this indicator.
DISCLAIMER – The writer shall not be liable for any failure that arises in the application of this instrument as it is only a trading suggestion. Hence, if you are a young trader, it is advised you apply the instructions therein on a demo account before you do on a live account.
Attached Image(s) (click to enlarge)
know thy edge and abide by it ! 4 in it shall thou be successful !
