1. EMAs

Question 1

How do you use price levels and EMAs to determine only going long or only going short?

Answer 1

Identify the macro trend - note the times that price is above or below all of the 5, 13, and 50 EMAs on the one hour timeframe as when to look for longs/shorts

Question 2

Using the 5 and 13 EMA, how do you know when to exit a LONG position?

Answer 2

You wait for two things.

1. The EMA ribbons to cross
2. The price to cross under them both

Question 3

When price deviates away from the EMAs, what does that mean?

Answer 3

It means volatility has crept into the price move

Question 4

When the 5 and 13 EMAs cross the 50 EMA on the one hour timeframe, what just happened?

Answer 4

The macro-trend changed

Question 5

At what point is a change in trend confirmed?

Answer 5

Upon a successful price backtest of the 50 EMA

Question 6

What can be said of trading the moving averages over the weekend?

Answer 6

It’s largely dead space and flat (so don’t do it)

Question 7

You have a LONG and on the fifteen minute timeframe the 5 and 13 EMAs cross indicating the end of your day trade. What is the final thing to confirm it?

Answer 7

The price crossing the 50 EMA

Question 8

What two moving averages do the banks, hedge funds, etc all use?

Answer 8

The 50 and 200 daily MAs

Question 9

At what point do we become interested in price action?

Answer 9

When it moves away from its moving average

Question 10

Why does the market maker bring price back to the moving average?

Answer 10

To reset the cycle

Question 11

When assessing price movements when it is away from the moving average, what two things are important?

Answer 11

1. How far away from the MA is it?
2. What direction is the MA actually pointing?

Question 12

If the MA is pointing upwards, even just a bit, what does it mean?

Answer 12

You have momentum to the upside

Question 13

The 50/200 day EMA strategy is what?

Answer 13

When price moves away and fans the bands out, wait for it to hit the max width and then regulate, and then enter. Take profit when price moves back to the 50 EMA

Question 14

The W formation always forms where?

Answer 14

At or below the 50 EMA

Question 15

Careful when EMA bands are flat..

Answer 15

It is not a time to enter

Question 16

You get better retracements towards the 50 EMA when?

Answer 16

None of the EMA bands are flat and they are well fanned apart

Question 17

Price needs to close above the 200 EMA to give you the bias of what?

Answer 17

Going long

Question 18

If the 200 EMA acts as such good support, why does it frequently get wicked below?

Answer 18

The wicks are when market maker is hunting stop losses

Question 19

Minimum requirements to enter short?

Answer 19

Downward momentum and price closes below the 5 and 13 EMA

Question 20

When two out of three stages are complete and price looks like it’s reversing early (before the third stage), how can you tell if it’s definitely reversing or not?

Answer 20

When the 5 and 13 switch and both cross over the 50 EMA, momentum has switched sides and the structure has changed