5 ema strategy by samscripter — TradingView India (2024)

FAQs

How to use 5 EMA indicator in TradingView? ›

The setup makes our trading more profitable with minor losses and major profits.

According to Subhashish Pani this strategy has 60% success rate. When ever a Candle closes completely above 5 ema (no part of candle should be touching the 5ema), then that candle should be considered as Alert Candle.

This indicator is based of Subhashish Pani's (power of stocks) 5 EMA Strategy. It plots 5 EMA and Buy/Sell signals with Target & Stoploss levels.

Computation of the Current EMA: Ultimately, the current EMA is calculated using the subsequent formula: EMA = (Closing price x multiplier) + [EMA (from the previous day) x (1 - multiplier)]

When the price is above the 5 EMA, it often suggests that the price has moved away from its mean point and is likely to come back to the mean at some point in time. The 5 EMA scalping strategy is a reversal strategy based on the logic that the price has to return to its mean.

The 20 EMA Strategy

Experts suggest that using 15-minute EMA is most effective for intraday trades that are carried out during periods of high market volatility. To interpret the 20 EMA, you need to compare it with the prevailing stock price. If the stock price is below the 20 EMA, it signals a possible downtrend.

How Does the 5-8-13 EMA Crossover Work? The crossover detects momentum shifts, which can hint at significant price moves in the near term. When the 5-EMA crosses above the 8 and 13 EMAs, it suggests a rising bullish momentum. When the opposite happens, it indicates bearish momentum.

The EMA gives more weight to the most recent prices, aligning the average closer to current prices. Short-term traders typically rely on the 12- or 26-day EMA, while the ever-popular 50-day and 200-day EMA is used by long-term investors.

A 20-period EMA is widely used on 5-minute charts due to its high responsiveness to the most recent price changes, which is crucial for rapid momentum-based advanced forex trading. The MACD is based on EMA and typically consists of two lines and a histogram.

Which strategy is most profitable? ›

A common trading strategy utilizing EMAs is to trade based on the position of a shorter-term EMA in relation to a longer-term EMA. For example, traders are bullish when the 20 EMA crosses above the 50 EMA or remains above the 50 EMA, and only turn bearish if the 20 EMA falls below the 50 EMA.

100 period: There is something about round numbers that attracts traders and this also holds true when it comes to the 100 moving average. It works very well for support and resistance – especially on the daily and/or weekly time frame. 200 / 250 period: The same holds true for the 200 moving average.

This isn't a fancy candlestick pattern; it's simply a candle that meets two key criteria: Price Position: The candle must be closes above the 5 EMA. This reinforces the initial uptrend assumption. Non-Touching High/Low: The qualifying candle's low shouldn't touch the 5 EMA.

When a trader is using an exponential moving average indicator within their strategy, they may choose to buy when the price dips near, or just below, the EMA line. On the other hand, when the EMA is falling, traders may choose to sell when the price is rallying towards, or just above the EMA.