wdbrand
"What MA's do you use on the 5 min. chart, and which one would you look for a break thru."
Five-minute charts are excellent for intraday trading...
not too fast, not too slow.
Let me say that this time frame is not perfect for everyone.
When I say "excellent", I mean that I personally find them easy
and dependable.
First I get a signal on a 1-minute chart, which seems
to be a little fast for a lot of traders.
But again, the 5-min. chart works just fine.
Try back testing an exponential 7 and 17 minute MA first.
For some reason these work well in most market conditions.
I've tried nearly 30 different combinations and these
have proven the most reliable in back tests.
Let's take a look at the NAS yesterday.
Create a 5 min. chart and apply the 7 and 17 EMAs - you should
make them different color for easier identification.
My habit is to make the faster one (in this case the 7)
in any warm color and the slower one (17) in a cool color.
So yesterday (8/23) at the open we see that the price
opens slightly lower than the 8/22 close, and falls
down just below the 17 ema for a moment.
Generally during the day when the price closes closes
below the 17, it signals a sell and when it
closes above the 7 ema it signals a buy.
Back to the chart - the price turns up quickly in the next 5 minutes signaling a buy. But before we jump in,
we should wait until we see some sort of break through
some near resistance which would provide a buy confirmation.
That's easily done when we see the second 5 min. bar
close above the previous day's close. We go long.
When the price is above the 7 ema, it tends to trend up
for decent periods of time. When the price falls below the 7 ema,
it tends to find support at the 17 ema.
If it falls below the 17 it signals a sell.
Now if that's all there was to it, it would be a piece of cake.
However, it's seldom that easy.
If you're not totally bored with this stuff and would
like to know some more details, we could go over those
much faster in a Voice Chat.
"Also does this work on the indexes or stocks or both?"
Works equally well for stocks... but these particular MAs are only
suitable for a 5-minute chart. Other time frames require
different MAs.
BTW, as mentioned, I also use another MA channel
with a good deal of success... but it simple takes
me too long to type out all of these details.
Hope you're doing well,
FLACK |
