Scalping system #6 (EMA Bands)
Submitted by User on July 19, 2007 - 18:54.
This scalping system was sent by Frank Tenerife (Spain).
Thank you Frank! You contribution is greatly appreciated!
Here is the system:
"This is an efficient system of scalping that works in 1 minute up to 1 day all periods and all Currency pairs
Ema 3
Ema 5
Ema 7
Ema 9
Ema 11
Ema 13
Color yellow
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That would depend on a currency pair.
For example, for GBP/USD and EUR/USD the best time to trade would be London and NY sessions, especially hours from 7am to midday EST.
/JPY pairs would trend well during Tokyo session (7 pm - 4 am EST), and also during London and NY overlapped hours.
If you choose one pair to trade with (which is always recommended in the beginning) you can very quickly learn about its active and less active/inactive hours.
This system requires a well trending active market. So you can try looking back at historical data and simply write down the hours during which a currency pair appeared to be most active. In the end you will see a general picture, that will tell when it is the best time to trade a chosen currency pair with this system.
Mike
Very informative and potential system will try it and see
Done!
Please upload image as an example.
Hi Alex here,
Simply for those who want to know more.
The idea of using multiple EMAs for trading (with the exact settings described in the rules above, except for 55 EMA) was originally described by Alan Hull in his work "Active Investing". He was using it for stock markets and long term trading primarily on weekly charts.
According to him:
"To get a good Long entry:
- The long term group (in this case the green EMAs) must be spreading apart or running parallel with each other.
- The long term group (green) must be pointing upwards.
- The straighter the long term group of lines are, the less volatile the trend is.
- The short term group (yellow EMAs) can pullback (ie. compress together) but if they cross into the
long term group then the trend is weakening and may be about to break.
This type of qualitative analysis is only used when entering the market and the idea is to avoid volatility. We want to 'Buy and Hold' and not get bounced in and out of the market.
Judging the quality of trends is the most subjective function we will have to perform."
Simply thought it would be helpful to find out what the creator of the multiple EMA approach - Alan Hull - used this strategy for.
Thanks to Frank Tenerife for the great research and bringing this method to everyones attention!
Hello everyone!
This is my addition to the rules posted above:
The obvious rules are that we trade only long when we are above 55 EMA, short - below it.
Once all yellow are on top of all green we go long, opposite - short.
Also Exit can be on the first touch of yellow and green EMA OR since all EMAs should be trading straight once we are in, the exit can be on the first cross of two yellow EMAs - EMA 3 and EMA 5.
These exit methods, I believe, should only be used as an emergency exits. Ideally traders would set a fixed profit target as described in the rules above and get out when this target is hit.
This scalping system shows good potential to scalp the market confidently with this visual system. Just don't be greedy. Set your profit targets as described in the rules and enjoy the success!
Edward.
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