[Tams]

Originally Posted by enochbenjamin »

one reason is 34 is a mystical fib number (21 + 13)

another reason is...

34 falls between the popular institutional 20 MA and 50 MA.
an "in-between" of these MAs captures the action of both.

[will1709]

I was only demo trading today but I thought this was a good setup offering a number of entires, and scope for analysis.

Breakout from the short-term bull trend in a bull descending channel. Almost textbook breakout pullback with the bear high touching the base of ascending trend and kissing the 34EMA (light blue line). Price corrected/trading range, pullback to the 34EMA. After failure of trend reversal the bear action increased in momentum, as expressed by the kissing of the 21EMA. Price did not initially break the lower channel with the pullback near the edge. Given its proximity to the edge I considered this a valid entry after the kiss of the 21EMA, but more importantly because of prior action with rejection of bull trend line, the correction, lower high and resultant momentum. Maybe this was more aggressive, the point was just to demonstrate the 21/34ema. I use both because they give me a little better idea of the strength of momentum.

I don't have a reason (fib/institutional mid) for selecting these magic number, my reasoning is from reading forums and speaking to experienced traders, as well as reading books in which these numbers were frequently commented upon. I've tried out many moving averages but found the larger ones impractical with infrequent pullbacks, in practice the kisses of these dynamic areas of support and resistance seem like very nice visual gauges of momentum so my reasoning is more practice based than infallible logic.

[markw]

For more infrmation on the 30 minute 34EMA method

30-34 Mechanical Trading System by GB007

He stopped using it because the decrease in the daily range.

[enochbenjamin]

If you have the time observe the 21 EMA after a big move. For example after a violent market move after a news event the first retrace to the the 21 EMA often offers a perfect entry in the direction of the move. Very low risk (4ticks).

[drebg]

Originally Posted by Tams »

another reason is...

34 falls between the popular institutional 20 MA and 50 MA.
an "in-between" of these MAs captures the action of both.

Yup! This is dead-on. I've used the 20/50 for years and now often simply use the 34 for this very reason.