-----triple EMA Xover ------
Another quick one.
Plot 3 moving exponential moving averages with periods 5/13/68.
30 minute charts seem to work very nice. Experiment with other timeframes at will.
Short: (only apply at close of the candle)
EMA5 crosses below EMA13
You will see this catches the trends very well. But like all MA systems you will get bitten by a sideways market. The EMAs keeps crossing and giving you several small losses in row.
When you look more close at when that happens you will notice that it's best not to trade on major (USA) holidays, Greenspan and on Friday(afternoons). On those occassions the market doesn't move 'realistic' so avoid it or watch the trade very carefully if you want to trade or have an open position.
One more refinement is using the EMA62
Using the EMA62 enters the trade a bit later and does give less signals than just a 5/13 cross. But if you look at the charts a bit you will see it usally signals strong trends. Both EMA5 and 13 need to cross eachother and recently crossed EMA68.
To summarize a short trade:
- Never trade on holidays.
- Never trade on Friday afternoons. Or probably don't trade on Fridays at all.
- Wait around 7 hours for the market to settle after a Greenspan speech.
- Entries are only taken at the close of the candle.
- Go short when EMA5 crosses below EMA13
- For an extra strong signal wait for EMA5<EMA13 and EMA13<EMA68.
This crossing should happen in a short period of time. Between 0 and 3 candles seem to give the strongest signals.
- Exit the trade if EMA5 crosses over EMA13
A simple system. Unfortunately not easy to program because it needs to keeps an eye on Alan
