Once you get confirmation with a bullish reversal candlestick (for an uptrend trade, place a buy stop order 3-5 ticks above the high of that bullish reversal candlestick. The best way is to use price action by the use of reversal candlesticks. How to trade the bounce on the 200 EMA line: Step 4: Wait for price to come to the 200 EMA and trade the bounce of price on the 200 EMA line. Step 3: Check the 1H timeframe: is the trend the same as in the 4H and Daily chart? Step 2: Check the 4H timeframe: is the trend the same as in the Daily chart? Step 1: Check the Daily timeframe: Is the trend up or down? “Buy the dips” and “Sell the rallies” in the 1H timeframe. Your trade entries are executed when the trend in the 1H chart is the same as the 4H and the Daily charts. If so, switch to the 1H chart and check if the 1H chart is in the same trend as the Daily and the 4H charts. Is it in the same trend as the Daily chart? Next, switch to the 4H chart and see where the 200 EMA is relative to price. The Daily chart determines the main trend. First, after placing the 200 EMA on your Daily chart, see if it’s an uptrend or a downtrend. It uses the Daily chart, the 4H chart, and the 1H chart. The 200 EMA SYSTEM is a multi-timeframe strategy. When price is below the 200 EMA, that’s a downtrend How it works: When price is above the 200 EMA, that’s an uptrend. Here’s what you need to know about the 200 EMA: Because 200 EMA is one very popular indicator used by lots of traders. Why 200 EMA? Why not use other EMA's like 100 EMA, or 50 EMA or 20 EMA or 10 EMA? Helps identify the main trend - whether the market is going up or down. Trades with the trend and effectively buys low and sells high. It's very appealing with the potential to bring you hundreds of ticks a month. The 200 EMA SYSTEM is very simple and easy to follow.
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