Extract from Bunnygirl trading setups
Chart Setup:
30 minute chart - candles
5 period weighted moving average on close (make red line)
20 period exponential moving average on close (make blue line)
100 period weighted moving average on close (make green line)
Relative Strength Index (default 14 periods) with a sinle horizontal line at 50%
Trade Setup:
When the Red line (wma5) crosses the Blue line (ema20) a potential entry is signalled. It is important to WAIT until price has passed the filter before the actual entry takes place. The filter is an important part of the system and is used to eliminate false entries that take place because of market whipsaws.
In addition to the filter level being met before entry, it is also important that RSI must have recently crossed the 50% line in the direction of the entry too.
Filters:
For gbp/usd the filter is 30 pips
For eur/usd the filter is 20 pips.
We will introduce the role of the Green line (wma100) shortly.
Presence of filter? Presence of RSI? H-m-m. What a nonsence!
"whispers of emas", "Those who have ever read about Fluid Mechancis or Dam spillways, they can better relate the price behaviour in the Diplomatic Channel like Hydraulic Jump". Sounds familiar?
Bill Williams used same nice, nonsence words.
Remember hunter - price drive emas, no emas drive price.