EMA's are a type of moving average that places a greater weight on more recent data points.
8EMA = Exponential Moving Averages of the last 8 candle closing prices.
EMA's adjust with respect to chart time frame.
🧵EMA + VWAP STRATEGY
Every trader has a go-to strategy that works best for them. My trading is all about keeping it simple stupid and revolves around two indicators - Exponential moving averages and vwap.
Here's the strategy that I utilize on nearly 80% of my trades.
👇
EMA's are a type of moving average that places a greater weight on more recent data points.
8EMA = Exponential Moving Averages of the last 8 candle closing prices.
EMA's adjust with respect to chart time frame.
Volume Weighted Average Price - A key intraday indicator in my trading that offers the true average price based on price & volume.
Calculation: (Price x # of shares traded) / total shares traded
- 8
- 21
- 50
While I do utilize the 50EMA, the 8 & 21 EMA are most important for this strategy. Some people use the 9 and 20 which are essentially the same thing. REMEMBER: EMA'S adjust with respect to time frames.
2. Ema Crossover
3. Pullback/Retracement to the EMA's
4. Higher conviction when EMA's are above vwap for calls and below vwap for puts.
5. Entry off of 8ema taps
An ema crossover signals to me that a trend is forming. I tend to see for a call strategy the trend is stronger when EMA's are above vwap and the same for puts when EMA's are below vwap.
I never add directly into a large red or green candle extended from the EMA's bc with every large move there will always be a pullback/bounce. That's where I like to add.
1. Bearish 8/21 EMA crossover to the downside
2. EMA's below VWAP
3. Retracement to the 8EMA triggers me to add 363p
4. Price action rejects 8EMA
5. Exited for +103% 24 minutes later
As you can see here we get a bullish 8/21 crossover and a pullback to the 8ema. The vwap rejection plummeted the price and the strategy would have failed here.
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I’m torn on how to approach the idea of luck. I’m the first to admit that I am one of the luckiest people on the planet. To be born into a prosperous American family in 1960 with smart parents is to start life on third base. The odds against my very existence are astronomical.
I’ve always felt that the luckiest people I know had a talent for recognizing circumstances, not of their own making, that were conducive to a favorable outcome and their ability to quickly take advantage of them.
In other words, dumb luck was just that, it required no awareness on the person’s part, whereas “smart” luck involved awareness followed by action before the circumstances changed.
So, was I “lucky” to be born when I was—nothing I had any control over—and that I came of age just as huge databases and computers were advancing to the point where I could use those tools to write “What Works on Wall Street?” Absolutely.
Was I lucky to start my stock market investments near the peak of interest rates which allowed me to spend the majority of my adult life in a falling rate environment? Yup.
Ironies of Luck https://t.co/5BPWGbAxFi
— Morgan Housel (@morganhousel) March 14, 2018
"Luck is the flip side of risk. They are mirrored cousins, driven by the same thing: You are one person in a 7 billion player game, and the accidental impact of other people\u2019s actions can be more consequential than your own."
I’ve always felt that the luckiest people I know had a talent for recognizing circumstances, not of their own making, that were conducive to a favorable outcome and their ability to quickly take advantage of them.
In other words, dumb luck was just that, it required no awareness on the person’s part, whereas “smart” luck involved awareness followed by action before the circumstances changed.
So, was I “lucky” to be born when I was—nothing I had any control over—and that I came of age just as huge databases and computers were advancing to the point where I could use those tools to write “What Works on Wall Street?” Absolutely.
Was I lucky to start my stock market investments near the peak of interest rates which allowed me to spend the majority of my adult life in a falling rate environment? Yup.
