This is the first post about my favourite indicators.
I must admit that when I am looking at the charts I focus on Price Action and then if there is a setup I use the techniccal indicators.
The EMA applied to typical price is an useful tool.The typical price is the averagen of the High +Low+Close prices.It is the same formula used to calculate the Pivot Point.I rather prefer the Exponential moving average than the simple one because the former gives more weight to recent prices instead of giving the same weight to all data from the period choosen.So we have a moving average,the exponential, applied to Pivot Ponts in the same tool.Interesting isn't it ?
How do I use this EMA ?.Mainly like a dynamic support or resistance near key horizontal levels,supply / demand zones. I use it in the daily timeframe plotting a 34 period EMA in my charts.When the price reaches the zones I expect a reaction to the EMA producing a bounce in the direction of the trend ,a pull back .My trigger is always a price action pattern the Shapiro effect.There is also the chance to look for reversion but this strategy is beyond my skills as I am a newbie in Forex.
There is another way to trade with this moving average,the strategy is widely described by Frank Ochoa,you cand find a free e-book avaible in this link http://pivotboss.com/free-ebook/.The strategy is the PEMA pull back,he uses a set of EMAs .It is a trend following strategy looking for pull backs and entering the trade when the price crosses the EMA.This strategy IMHO relys too much on indicators.
In the next post I shall describe how I use the Commodity Channel Index as an enhancer of the setup.
See you soon and good hunting meanwhile.
I must admit that when I am looking at the charts I focus on Price Action and then if there is a setup I use the techniccal indicators.
The EMA applied to typical price is an useful tool.The typical price is the averagen of the High +Low+Close prices.It is the same formula used to calculate the Pivot Point.I rather prefer the Exponential moving average than the simple one because the former gives more weight to recent prices instead of giving the same weight to all data from the period choosen.So we have a moving average,the exponential, applied to Pivot Ponts in the same tool.Interesting isn't it ?
How do I use this EMA ?.Mainly like a dynamic support or resistance near key horizontal levels,supply / demand zones. I use it in the daily timeframe plotting a 34 period EMA in my charts.When the price reaches the zones I expect a reaction to the EMA producing a bounce in the direction of the trend ,a pull back .My trigger is always a price action pattern the Shapiro effect.There is also the chance to look for reversion but this strategy is beyond my skills as I am a newbie in Forex.
There is another way to trade with this moving average,the strategy is widely described by Frank Ochoa,you cand find a free e-book avaible in this link http://pivotboss.com/free-ebook/.The strategy is the PEMA pull back,he uses a set of EMAs .It is a trend following strategy looking for pull backs and entering the trade when the price crosses the EMA.This strategy IMHO relys too much on indicators.
In the next post I shall describe how I use the Commodity Channel Index as an enhancer of the setup.
See you soon and good hunting meanwhile.