FalconRed 5 EMA Indicator (Powerofstocks) by falcon_red — TradingView India (2024)
Improved version: This indicator is based on Subhashish Pani's "Power of Stocks" 5 EMA Strategy, which aims to identify potential buying and selling opportunities in the market. The indicator plots the 5 EMA (Exponential Moving Average) and generates Buy/Sell signals with corresponding Target and Stoploss levels.
Subhashish Pani's 5 EMA Strategy is a straightforward approach. For intraday trading, a 5-minute timeframe is recommended for selling. In this strategy, you can choose to sell futures, sell calls, or buy puts as part of your selling strategy. The goal is to capture market tops by selling at the peak, anticipating a reversal for profitable trades. Although this strategy may result in frequent stop losses, they are typically small, while the minimum target should be at least three times the risk taken. By staying aligned with the trend, significant profits can be achieved. Subhashish Pani claims that this strategy has a 60% success rate.
Strategy for Selling (Short Future/Call/Stock or Buy Put): 1. When a candle completely closes above the 5 EMA (with no part of the candle touching the 5 EMA), it is considered an Alert Candle. 2. If the next candle is also entirely above the 5 EMA and does not break the low of the previous Alert Candle, ignore the previous Alert Candle and consider the new candle as the new Alert Candle. 3. Continue shifting the Alert Candle in this manner. However, when the next candle breaks the low of the Alert Candle, take a short trade (e.g., short futures, calls, stocks, or buy puts). 4. Set the stop loss above the high of the Alert Candle, and the minimum target should be 1:3 (at least three times the stop loss).
Strategy for Buying (Buy Future/Call/Stock or Sell Put): 1. When a candle completely closes below the 5 EMA (with no part of the candle touching the 5 EMA), it is considered an Alert Candle. 2. If the next candle is also entirely below the 5 EMA and does not break the high of the previous Alert Candle, ignore the previous Alert Candle and consider the new candle as the new Alert Candle. 3. Continue shifting the Alert Candle in this manner. However, when the next candle breaks the high of the Alert Candle, take a long trade (e.g., buy futures, calls, stocks, or sell puts). 4. Set the stop loss below the low of the Alert Candle, and the minimum target should be 1:3 (at least three times the stop loss).
Buy/Sell with Additional Conditions: An additional condition is added to the buying/selling strategy: 1. Check if the closing price of the current candle is lower than the closing price of the Alert Candle for selling, or higher than the closing price of the Alert Candle for buying. - This condition aims to filter out false moves, potentially preventing entering trades based on temporary fluctuations. However, it may cause you to miss out on significant moves, as you will enter trades after the candle closes, rather than at the breakout point.
Note: According to Subhashish Pani, the recommended timeframe for intraday buying is 15 minutes. However, this strategy can also be applied to positional/swing trading. If used on a monthly timeframe, it can be beneficial for long-term investing as well. The rules remain the same for all types of trades and timeframes.
If you need a deeper understanding of this strategy, you can search for "Subhashish Pani's (Power of Stocks) 5 EMA Strategy" on YouTube for further explanations.
Note: This strategy is not limited to intraday trading and can be applied to positional/swing
Release Notes
Added the Buy indicator logic
Release Notes
Retaining the state of the Alert candle over the trend to get more accurate indication on selling and buying level
Release Notes
The latest update enhances the indicator by refining the signal levels, minimizing false alerts and noise. Specifically, the new version introduces a 0.001% buffer to the existing threshold levels, resulting in significantly reduced noise and improved accuracy in detecting alert candles.
This Strategy is based of Subhashish Pani's (power of stocks) 5 EMA Strategy. strategy used for sell in 5 minutes and for buy in 15 minutes .. 1) if price is above 5 Ema and not touching Ema use as alert candle.. 2) if price break low of alert candle strategy open trade ..
The strategy has a 60–70% success rate, but it will often hit stop losses. If you stay with the trend, you can make big profits. The basic principle should be to try to catch the tops, so when you sell at the top and it turns out to be a reversal point, you can get a good profit.
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.
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.
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.
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.
Basic Concept:The strategy involves tracking the 5 EMA on a price chart. When the price crosses above the 5 EMA, it may be considered a bullish signal, suggesting a potential uptrend. Conversely, when the price crosses below the 5 EMA, it may be seen as a bearish signal, indicating a potential downtrend.
EMA may be combined with other indicators, such as RSI, MACD, or other moving averages, to enhance decision-making processes, confirm trend direction, and identify overbought or oversold conditions.
The 5 and 9 EMA crossover strategy is a popular trading technique. When the 5-day EMA crosses above the 9-day EMA, it generates a bullish signal, suggesting a potential buying opportunity.
The EMA indicator is regarded as one of the best indicators for scalping since it responds more quickly to recent price changes than to older price changes. Traders use this technical indicator for obtaining buying and selling signals that stem from crossovers and divergences of the historical averages.
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.
This strategy calculates the 5-day, 10-day and 20-day exponential moving average (EMA) lines and uses the Super Trend indicator to generate buy and sell signals. It generates buy signals when the 5-day EMA crosses above the 10-day EMA and both the 5-day and 10-day EMA cross above the 20-day EMA.
Introduction: My name is Arielle Torp, I am a comfortable, kind, zealous, lovely, jolly, colorful, adventurous person who loves writing and wants to share my knowledge and understanding with you.
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