acestocksplayer
I have some more observations about the 50-100 EMA system charts....I finding some usefulness from them and want to get this in writing before I forget it all...lol!

I first mentioned these system charts about 3 months ago, after learning that some professional technicians favor them...the direction (up or down) of the 100 EMA line tells them if the stock is generally in an up-trend or a down-trend...and the position of the 50 EMA (above or below) the 100 EMA tells them if a stock is on a general buy signal or sell signal. Whereas my charts use the SMA lines for the most part, this system favors the EMA lines. (My system does use the 13 EMA line but not on the other lines.) The EMA difference is that EMA lines weight recent movements, so if the early dates of the 50 SMA line might be lower numbers, the 50 EMA line will put less emphasis on those older numbers in favor of the recent trend, so if a recent trend is higher prices, the 50 EMA line is more likely to be rising before the 50 SMA line, and so the EMA lines give creedence to recent trends....

In addition, the traders who use this system will look at the OBV graph to CONFIRM if a stock should be a buy or sell by looking at the general direction (up or down) of OBV...they will generally draw in trend lines against the OBV graph to demonstrate up or down direction. If there is divergence, then there is no confirmation, and buys should be avoided. From my readings about this system, the astute trader should not interpret a rise in OBV as an early buy signal even when the 13 and 50 EMA are not signaling a buy.

So far, so good....and traders using this system claim that it works equally well in shorting stocks and the market....but I still find that the system as described, is not quite precise enough to nail down consistent good results with entry and exit points.....

Then, it dawned on me to try and incorporate some of my personal system into this 50-100 EMA system to make it better....so for instance, my system is loosely based on what I call the TRIPLE-CROSS system....in essence, the TRIPLE CROSS looks at what I call "the 3 Legs of the Stool".....those 3 legs are part of a TREND SYSTEM too....the 3 legs are the 50 SMA line, and the ADX-14 and ADX-65 graphs and they serve as the White Flag or Red Flag of whether a trade should be contemplated....plus I use a few other tools to more precisely time my entry and exit points once I see the white flag or red flag... 

Buy signals:

  1. Up-cross of the 50 SMA line
  2. Up-cross of the +DI line over the -Di line on ADX-14 graph
  3. Confirmation: Up-cross of the +Di line over the -DI line on ADX-65 graph (for longer term)
  4. Short-term impulse signals: Use combination of FAST MACD and STANDARD MACD for precise entry and exit signals
  5. Keltners or BBs: Keep an eye on outer limits for over-bought positions and prepare to take profits 
Sell signals:

  1. Three red and/or black candles in a row following a rally (with high beta stocks, I might use two consecutive candles instead of three)
  2. Down-cross of the 13 EMA line if the first step has not occurred
  3. Confirmation: 13-50 EMA down-cross
  4. Further confirmation: ADX -14 and ADX-65 graphs show -DI over +DI up-crosses. (The ADX-65 is a longer term bear confirmation.)
  5. Short-term impulse signals: Use combination of FAST MACD and STANDARD MACD for precise entry and exit signals
  6. Keltners or BBs: Keep an eye on outer limits for over-sold positions and possible early entry if capitulation occurs

So, these are the core element of my TRIPLE-CROSS system....

But it dawned on me that maybe I could incorporate the finer points in my system to make the 50-100 EMA system more precise....which is in my next post, with a chart example...
 
 
ALL OPINIONS, IDEAS AND DISCUSSIONS ARE BY ANONYMOUS PEOPLE. NEVER ACCEPT ANY COMMENTARY ON THIS FORUM OR WEBSITE AS INVESTMENT ADVICE. ALWAYS CONSULT A LICENSED BROKER OR REGISTERED INVESTMENT ADVISOR. WE ARE NOT RESPONSIBLE FOR YOUR ACTIONS.   

Enjoy the forum! Thanks, Mike
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acestocksplayer
More on the 50-100 EMA system...using some of my trading system elements to fine tune this system....

So, I ran some charts incorporating my fine-tune signals with the 50-100 EMA system....so, first, I need to re-define my rules to fit this system, as follows....So, what's mostly changed is that I am using the 50-100 EMA signal as the White Flag ÃƒÆ’ƒÆ’ƒÃ‚°Ã…¸ÂÂ or Red Flag ÃƒÆ’ƒÆ’ƒÃ‚¢Ã‚Å’....think of the 50-100 EMA with OBV system as the  ROAD MAP to tell me whether I can cruise the highway ahead at 70 MPH... or if I will need to have the snow tires on and brace for a white knuckle ride.... 

Once i understand the road conditions ahead, I can plan my tactical responses....so, here is the NEW SYSTEM, rolled out for the first time in print! Points 1, 2 and 3 are the ROAD SIGNS of the 50-100 EMA system and are in bold face type....the additional points are incorporating my tactical system for entry and exit points....
  
Buy signals:

  1. 100 EMA line must be rising ÃƒÆ’ƒÆ’ƒÃ‚°Ã…¸ÂÂ
  2. 50 EMA line must be ABOVE the 100 EMA line by 1% or more ÃƒÆ’ƒÆ’ƒÃ‚°Ã…¸ÂÂ
  3. OBV must be rising (use trend lines to show OBV rising trend) ÃƒÆ’ƒÆ’ƒÃ‚°Ã…¸ÂÂ
  4. Up-cross of the 50 EMA line by white candle or other bullish candles
  5. Confirm rising impulse with RISING 13 EMA line
  6. Up-cross of the +DI line over the -Di line on ADX-14 graph
  7. Confirmation: Up-cross of the +Di line over the -DI line on ADX-65 graph (for longer term)
  8. Short-term impulse signals: Use combination of FAST MACD and STANDARD MACD for precise entry and exit signals
  9. Keltners or BBs: Keep an eye on outer limits for over-bought positions and prepare to take profits 
  10. Watch for Trend Lines for points of resistance and support and further timing of entry/exits


Sell and Short Signals:

  1. 100 EMA line must be descending ÃƒÆ’ƒÆ’ƒÃ‚¢Ã‚Å’
  2. 50 EMA line must be BELOW the 100 EMA line ÃƒÆ’ƒÆ’ƒÃ‚¢Ã‚Å’
  3. OBV should be descending (use trend lines to show OBV falling trend) ÃƒÆ’ƒÆ’ƒÃ‚¢Ã‚Å’
  4. Three red and/or black candles in a row following a rally (with high beta stocks, I might use two consecutive candles instead of three)
  5. Down-cross of the 13 EMA line if the first step has not occurred
  6. Confirmation: 13-50 EMA down-cross
  7. Further confirmation: ADX -14 and ADX-65 graphs show -DI over +DI up-crosses. (The ADX-65 is a longer term bear confirmation.)
  8. Short-term impulse signals: Use combination of FAST MACD and STANDARD MACD for precise entry and exit signals
  9. Keltners or BBs: Keep an eye on outer limits for over-sold positions and possible early entry if capitulation occurs
  10. Watch for Trend Lines for points of resistance and support and further timing of entry/exits

So, here is a daily chart on SQUARE (Nasdaq: SQ) to show these principles in actual practice. On my charts, the thin vertical dashed lines represent impulse points where a trader can ENTER or EXIT....entry points are at the BLUE VERTICAL LINES...and the exit points are at the RED VERTICAL Lines....

The interesting thing is that many of the buy impulses took place as soon as the white price candles were clearing the 50 EMA line when the White Flag was waving...and in every instance (prior to this Friday's new buy impulse), there was room above for the price to move higher....but on Friday's most recent pop above the 50 EMA, there is no White Flag signal (50 line still under the 100 line), and the price pushed outside the Keltners for the one and only time (that is, on the buy signal day), which suggests the most recent buy impulse may not last long.... however, I am torn at odds here, because the Wedge Line breakout a few days earlier is typically a short term buy signal for me. So, I might have waived the 50-100 white flag rule for a short term trade, possibly? (It should be pointed out that I actually shorted SQ several days ago using a different chart where the 50 SMA was resistance--but the wedge line breakout won out and the 50 SMA failed to hold.) 

Using this system with a high alpha stock like SQ means that most trades take only a few days at most, and in some instances, large gains are possible...especially if the astute trader can incorporate OPTIONS trading successfully with this system....If the astute trader is confident in his/her system, then they can use shorter term options (like weekly) to keep capital costs down while enhancing returns with more successful trades over a shorter period of time....at least in theory, this is what I think could be! 

SQ Daily Chart (50-100 EMA)

[image]    
ALL OPINIONS, IDEAS AND DISCUSSIONS ARE BY ANONYMOUS PEOPLE. NEVER ACCEPT ANY COMMENTARY ON THIS FORUM OR WEBSITE AS INVESTMENT ADVICE. ALWAYS CONSULT A LICENSED BROKER OR REGISTERED INVESTMENT ADVISOR. WE ARE NOT RESPONSIBLE FOR YOUR ACTIONS.   

Enjoy the forum! Thanks, Mike
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acestocksplayer
Here's another chart using this NEW SYSTEM....

This is the VEEV Chart....VEEV is currently the #1 stock on the IBD 50 list....

The blue vertical lines mark points of entry...and the red vertical lines mark points to exit....in some cases, I would use intermediate entry and exit signals not shown on this chart which only come from many years of trading, but for the sake of sticking to the main points of this system, I am mainly showing the entry/exit points the system would prescribe...

One other thing: unlike most of the damaged charts that exist right now, notice that VEEV's chart still shows a WHITE FLAG...that is, the 50 EMA is above the 100 EMA line, and in recent days, both lines are RISING...and glance down to the OBV graph and it shows a rising line and breakout past the previous near term high...so, the WHITE FLAG is waving and it says to pick your buy points. The blue vertical lines show my OPTIMAL buy point, but not to say that there are not other intermediate buy points which can be teased out using intra-day charts....

Because this is an IBD 50 chart, I also show cup pattern bases and their points of entry...

VEEV daily chart (50-100 EMA)

[image] 
ALL OPINIONS, IDEAS AND DISCUSSIONS ARE BY ANONYMOUS PEOPLE. NEVER ACCEPT ANY COMMENTARY ON THIS FORUM OR WEBSITE AS INVESTMENT ADVICE. ALWAYS CONSULT A LICENSED BROKER OR REGISTERED INVESTMENT ADVISOR. WE ARE NOT RESPONSIBLE FOR YOUR ACTIONS.   

Enjoy the forum! Thanks, Mike
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acestocksplayer
HERE'S ONE MORE....ON THE 50-100 EMA system....

This is the chart for MEDP, another IBD 50 stock....I have no comments on this one...simply follow the chart mark-ups and compare it to my previous comments....I

MEDP daily chart

[image]
ALL OPINIONS, IDEAS AND DISCUSSIONS ARE BY ANONYMOUS PEOPLE. NEVER ACCEPT ANY COMMENTARY ON THIS FORUM OR WEBSITE AS INVESTMENT ADVICE. ALWAYS CONSULT A LICENSED BROKER OR REGISTERED INVESTMENT ADVISOR. WE ARE NOT RESPONSIBLE FOR YOUR ACTIONS.   

Enjoy the forum! Thanks, Mike
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