EMA 5 Alert Candle Short

28 Feb

The 5 EMA (Exponential Moving Average) Strategy is a simple yet effective trading strategy that helps traders identify short-term trends and potential entry and exit points. This strategy is widely used in intraday and swing trading, particularly in forex, stocks, and crypto markets.

Components of the 5 EMA Strategy
5 EMA: A fast-moving average that reacts quickly to price movements.
15-minute or 1-hour timeframe (commonly used, but adaptable to other timeframes).
Candlestick Patterns: To confirm entry signals.
How the 5 EMA Strategy Works
Buy (Long) Setup:
Price Above the 5 EMA: The price should be trading above the 5 EMA.
Pullback to the 5 EMA: A minor retracement or consolidation near the 5 EMA.
Bullish Candlestick Confirmation: A bullish candle (e.g., engulfing or pin bar) forms near the 5 EMA.
Entry: Enter a long trade at the close of the bullish candle.
Stop Loss: Place below the recent swing low or 5-10 pips below the 5 EMA.
Take Profit: Aim for a risk-reward ratio of at least 1:2 or trail the stop using a higher EMA (e.g., 10 or 20 EMA).
Sell (Short) Setup:
Price Below the 5 EMA: The price should be trading below the 5 EMA.
Pullback to the 5 EMA: A small retracement towards the 5 EMA.
Bearish Candlestick Confirmation: A bearish candle (e.g., engulfing or pin bar) near the 5 EMA.
Entry: Enter a short trade at the close of the bearish candle.
Stop Loss: Place above the recent swing high or 5-10 pips above the 5 EMA.
Take Profit: Aim for a 1:2 risk-reward ratio or use a trailing stop.
Additional Filters for Better Accuracy
Higher Timeframe Confirmation: Check the trend on a higher timeframe (e.g., 1-hour or 4-hour).
Volume Confirmation: Enter trades when volume is increasing.
Avoid Sideways Market: Use the strategy only when the market is trending.
Advantages of the 5 EMA Strategy
✔️ Simple and easy to use.
✔️ Works well in trending markets.
✔️ Helps traders capture short-term momentum.

Disadvantages
❌ Less effective in choppy or sideways markets.
❌ Requires discipline in following stop-loss rules.

28 Feb

Nota Keluaran

Strategy Description: EMA 5 Alert Candle Short
Overview:
This strategy is designed for short trades based on price interactions with the 5-period Exponential Moving Average (EMA). The system identifies a special "Alert Candle" that meets specific conditions and waits for a breakout of its low to enter a short position. Position sizing is calculated dynamically based on the length of the alert candle, ensuring a fixed risk of $2 per trade.

Entry Criteria:
EMA 5 Interaction Check:

The last three candles must have touched or been close to the 5 EMA.
The current candle must be significantly above the 5 EMA, meaning it does not touch it.
Alert Candle Formation:

If the above conditions are met, the current candle is marked as an Alert Candle.
The high and low of this candle are recorded as reference points.
Short Entry Condition:

The next candle must break below the low of the Alert Candle.
Once this happens, a short position is entered.
Risk Management & Position Sizing:
✅ Fixed Risk Per Trade: $2
✅ Position Size Calculation:

The length of the Alert Candle is calculated as:
Alert Candle Range = High - Low
Position size is determined using the formula:
Position Size = $2 / Alert Candle Range
Capital used is calculated as:
Capital Used = Position Size × Short Entry Price
✅ Trade Execution:
Stop Loss: The high of the Alert Candle.
Take Profit: Equal to the stop-loss distance (1:1 Risk-Reward Ratio).
✅ Capital Used is displayed on the chart for easy tracking.
Trade Execution Logic:
🔴 Step 1: Identify the Alert Candle (Based on EMA & candle positioning).
🟡 Step 2: Wait for Breakout Below the Alert Candle’s Low.
🟢 Step 3: Enter Short Position.
🔵 Step 4: Exit at Stop Loss (Alert Candle High) or Take Profit (1:1 RR).

Visual Aids in the Strategy:
📌 EMA 5 Line: Blue line for trend tracking.
📌 Alert Candle Marker: Red label above the Alert Candle.
📌 Trade Setup Lines:

Entry Line: Blue (short entry).
Stop Loss Line: Red (above entry).
Take Profit Line: Green (below entry).
📌 Capital Used Label: White text above the Alert Candle.
Advantages of This Strategy:
✅ Simple & Effective for Trend Reversals.
✅ Dynamic Position Sizing Adjusts to Market Conditions.
✅ Fixed Risk Per Trade Ensures Consistent Risk Management.
✅ Visually Clear Entries & Exits for Easy Execution.