![]() ![]() This doesn’t mean the MACD zero lag strategy will magically become profitable with the 50 E MA. If we plot both 50 and 200 E MA on the same chart, and insert the Zero Lag MACD indicator that lost money in the last video, you can see, that the False signals that were valid with the 200 period moving average, were filtered with the 50 period moving average. As you can see, the 200 E MA was acting as a support, and price made a move up and the profit target was hit. For example, here’s a trade analysis I shared on Patreon. Moving averages, especially the 200 period moving average, also works as a good support and resistance in a trend. And when the price is trending strongly in one direction, you can use the moving averages to find the average price, instead of buying and selling at the extreme top and extreme bottom. So when the price is in a range, you can use the moving average to filter bad trades setups. In simple words, moving averages are nothing but averages of the previous candles. Entry is after the close of that rejected candle and stop loss is above the candle highĥ, Draw trend lines as the price continues to move in the direction of the trade.Since I have already explained what a Zero Lag MACD is, and the strategy based around it in the last video, lets focus on the 200 and 50 period moving averages this time. Wait for rejection from that area on high volume in the downward direction.ģ. ![]() Price should be below 200 EMA or cross 200 EMA and should have closed reasonably well below a previous price action zone and then retraces back toĢ. Exit once 1:2 or 1:3 Risk to Reward ratio is seen or a major PA zone is reached or the inner most trend fan is broken by the price in the opposite direction.ġ. Draw trend lines as the price continues to move in the direction of the trade.Ħ. You could also move the stop loss to break even after price moves the same number of pips as size of the signal candle (high to low)ĥ. Move stop loss to break even after price moves reasonable number of pips (depending on your trading time frame and the volatility of the pair, it could beĪnywhere between 25 - 40 pips (on M!5). Entry is after the close of that rejected candle and stop loss is below the candle lowĤ. Wait for rejection from that area on high volume in the upward direction.ģ. Price should be above 200 EMA or cross 200 EMA and should have closed reasonably well above a previous price action zone and then retraces back toĮither the 200 EMA or VWAP or another previous price action zone or a confluence of one or more of 200 EMA, VWAP or PPA.Ģ. Ensure that there is "sufficient" gap to the next PA (in the direction of the trade)ġ. Refer to the "normal" sized candles for that pair in the recent past)ģ. Good size candles should form (Avoid Extreme candles which are too big or too small. Good volume must be present (preferably above the 200 EMA of the volume)Ģ. ![]() Do not enter a trade if you do not know how much capital you are risking.ġ. Capital preservation is key to long term success. Trade what you see and not what you thinkĨ. Stay out of the market before major news events like FOMC, Interest rate decisions,NFP etcħ. Make sure the "right" frame of mind is present along with good emotional controlĥ. Always check the price action on ALL higher time frames ( 4 Hour and Daily and Weekly and Monthly)Ĥ. This system works well on M15 and lower - preferably M15.ģ. Draw horizontal and non-horizontal (trend lines) on higher timeframes (Monthly, Weekly, Daily, 4 Hour)Ģ.
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