20 EMA and Patterns

[brownsfan019 17]

ES 1min/100 ema from this morning's action:

(also called the JMC setup )

 

[JMC 10]

ES 1min/100ema after hours doing pretty well tonight for anyone up. I'm just looking at pullbacks to the 100ema and preferably have tagged the bollinger band first. No other context being used, just noticed a few nice ones while doing some other chart work.

 

JMC also posted a TF chart and that brings up another way to play these if you develop a specific rule set (for example saying it must come from a bollinger band tag before looking at the pullback) - you could monitor the 4 indexes fairly easily as these charts are literally 2 indicators other than price. That TF short JMC had may not have occurred on the ES if you were just watching the ES.

 

 

Yellow boxes = EMA entries after a BB tag.

ES 1min/100ema from 8-23 after hours.

 

That's a good looking chart. Oil is choppy this morning. Just had a a couple of nice bounces off of the EMA on the ES.

 

 

Also, worth noting Gold rolling over after finding some resistance at the EMA area on the hourly.

 

[JMC 10]

ES 1min/100 ema from this morning's action:

(also called the JMC setup )

 

 

Sorry for the dual post. Must have posted yours as I was typing. Glad to see were seeing the same setups in real time. Great minds think alike.

[brownsfan019 17]

That's a good looking chart. Oil is choppy this morning. Just had a a couple of nice bounces off of the EMA on the ES.

 

 

I think if someone filters the trades by saying must tag the bb first and then cleanly test the MA, you could easily watch a few markets looking for clean setups like those ES longs this morning.

 

Now if you do not filter w/ the bb or something else, there will be more trades on a market but then the issue is defining what your pullback should look like. IMO a tag off the BB just provides a structure - price gets to 100 BB and rejects, retraces to EMA.

[ake 10]

This morning's trades. EUR/USD spot, 1m, 34EMA.

[drm7 10]

This morning's trades. EUR/USD spot, 1m, 34EMA.

 

34EMA seems like an unusual number. How did you come up with that?

 

Also, where did you close out your trades? Do you have fixed profit targets?

[ake 10]

34EMA seems like an unusual number. How did you come up with that?

 

Also, where did you close out your trades? Do you have fixed profit targets?

 

I got used to trading the 20 and the 50 EMA. 34 is about mid way between them, so you can catch the action of both and is simpler to have a single EMA.

 

I put a limit order to exit at the next level of recent support or resistance and let the trade run until I got a profit of about 20 pips (3 times larger than the risk), then I start looking for signs of weakness. Not very original, I'm afraid.

 

I do leave profits on the table. I exited the short trade this morning at market at +23 pips because volatility started to contract and there was a pause in the move. I later realised, looking at the big picture in 1m, that I exited just as the market was breaking the neckline of a massive head and shoulders pattern. The move was bound to go much further, but I didn't see it at the time.

 

[JMC 10]

Some nice moves in Gold overnight and this morning. Few opportunities both long and short on the 1 minute chart:

 

[ake 10]

Afternoon trades, EUR/USD spot, 1m.

[joshdance 10]

34EMA seems like an unusual number. How did you come up with that?

 

More likely, he uses it because many people do--it's the 8th number in the fibonacci series: 1,2,3,5,8,13,21,34,55. It's why you see 89 tick charts, or 233 tick charts, and so on.

[brownsfan019 17]

I would not get hung up on that actual number being used for the EMA setting, just get consistent with it I would suggest.

 

The thread started with a 20 EMA, we've seen others up to JMC's 100 EMA and they all have potential to work entries for you.

 

In addition to time charts, you could apply the EMA to tick, volume, momentum charts, etc. I've found the tick chart on the ES with JMC's settings to produce more trades (both good and bad).

[ake 10]

More likely, he uses it because many people do--it's the 8th number in the fibonacci series: 1,2,3,5,8,13,21,34,55. It's why you see 89 tick charts, or 233 tick charts, and so on.

 

Thanks for this, Josh. I actually didn't know it was a number if the Fibonacci series. A friend of mine trades oil here in London for BP and he uses the 34 EMA. I tried it out and seems to fit the EUR/USD well in 1m.

 

I personally don't think it would make any difference to trade the 34, 35 or 36. The difference is minimal most of the time and it would probably not make a difference to the size of the stop loss I use.

[JMC 10]

A couple of nice long entries in Oil this morning following Bernanke's comments. Hope somebody caught those. Can't get much better in terms of MAE/MFE on those two.

 

[JMC 10]

Also, looks like gold has rallied up to the EMA and found resistance on the hourly. Pretty volatile today.

 

[JMC 10]

Two other nice entries, both long and short, today on the ES.

 

[optimusprime 10]

this is a great thread, hope you don't mind if i follow along

[JMC 10]

this is a great thread, hope you don't mind if i follow along

 

Not at all. Welcome.

 

A few nice long entry opportunities in CL this morning.

 

 

And a couple in the ES.

 

[phoenix01 10]

Not at all. Welcome.

 

A few nice long entry opportunities in CL this morning.

 

 

And a couple in the ES.

 

 

Do you just take the morning trades on the ES, what were you reasons for not entering at the 10:45-50 test?

[JMC 10]

Do you just take the morning trades on the ES, what were you reasons for not entering at the 10:45-50 test?

 

That's a good question. Wasn't in front of a computer earlier this morning so I wasn't trading. Just scrolled through and posted some setups that worked. The 10:45 entry would have been valid (though a little close to the lunchtime chop period) and would have been a small loser depending on how you handled your stop loss. It's important to note that for every winning setup, there are many that do not work.

 

If you look closely at the charts you can always find instances where EMA support or resistance fails. I think any edge derived from trading off of the EMA area is the ability to keep risk rather limited in comparison to potential reward on a winner. In fact, that's why I prefer trading CL over ES, the risk reward is typically much better.

[phoenix01 10]

I agree the small risk you take on each trade is crucial to the success of this setup.

[optimusprime 10]

maybe a silly question but i use ninja trader and i am not sure on the settings i see above. are you using an EMA bollinger band @ 100? and what time frame?

thank you

[brownsfan019 17]

maybe a silly question but i use ninja trader and i am not sure on the settings i see above. are you using an EMA bollinger band @ 100? and what time frame?

thank you

 

JMC is using a 100 EMA with a 100 bollinger on a 1 minute chart.

 

I have posted some charts with a 20 EMA on a 5 minute chart.

[steveh2009 10]

Also, a 20 ema on the 5 min chart is equivalent to a 34 ema (or 33, close enough) on a 3 min chart.

 

I don't have any problem believing there's a lot of good entries. Enough pics have been posted on that. The obvious thing left to do is to calculate the tipping point for the MAE and the average target which gives you the best stats.

 

Otherwise, I think we're in Woodies CCI land here where everyone who believes in it believes it's a winner IF just the right trade management were uncovered...but there are no winners in the long run on the brokerage statements.

 

[Disclaimer: I wasted the first year of my futures trading education (8 yrs ago) looking into the Woodies CCI snake oil. I saw 1000's upon 1000's of good historical setups. But it is and always has been a losing system]

[brownsfan019 17]

Also, a 20 ema on the 5 min chart is equivalent to a 34 ema (or 33, close enough) on a 3 min chart.

 

I don't have any problem believing there's a lot of good entries. Enough pics have been posted on that. The obvious thing left to do is to calculate the tipping point for the MAE and the average target which gives you the best stats.

 

Yep, how one manages the trade is a big part of any trading plan. This thread has given some ideas on how to enter. Exits, stop placement, etc. is the next part of the equation and each trader has their own views of what is 'good' here.

[JMC 10]

maybe a silly question but i use ninja trader and i am not sure on the settings i see above. are you using an EMA bollinger band @ 100? and what time frame?

thank you

 

Brownsfan has it right- 100 EMA on a 1 minute chart. Bollinger Bands are set to the usual +-2 standard deviations. Also, I have my charts set to all sessions.