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I'm a newbie in regards to trading, price charts, indicators and such. I'm not even sure all the terminology I'm using it's correct, since English it's not my native language, so please go easy on me :)

My question is very specific and is about an up-trend price pattern in regards to its EMA(25) indicator.

As a starting point, this chart may be used as example for what I'm going to ask next:

enter image description here

The idea is this: In an up-trend pattern as the one depicted above, does it make sense to consider this EMA in particular as a dynamic support? I know that any plotted mean line is arbitrary chosen, but this one, especially in sections 1 and 2, seems to work as I was suggesting. As a consequence, every time one or more candles break through the EMA, I can imagine a (temporary?) trend inversion, thus a possible entry point. In example, exactly at the end of the plot, probably an inversion is going on; so waiting until the candles "touch" the EMA line, just before they rise again, could be seen as a good entry point. As it was during the 2 hours period marked as "A". Thanks.

Edit: It seems that here I partially found an answer.

  • There's no rule to what you're asking about, it's completely subjective. Should be noted that the majority of professional traders don't use indicators, at least not as the primary method. – misantroop Jan 14 '18 at 21:49
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Indicator works perfectly during uptrend and downtrend. So, when there is a trend, yes you are right. But you should never rely on a single indicator to make trading decisions. By the way, when it comes to flat market you may and will observe that oscilliators work perfectly and give a good trading signals, then this EMA will not work.

  • Yes, I was referring exactly to when the trend is up or down. Thanks – dentex Jan 10 '18 at 9:27

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