In ARZ Trading System, we use multiple
EMAs to analyze the market, as follows:
1. 200EMA, 100EMA, & 50EMA: Analyze
the big picture (Major Structure). What is
happening in higher timeframes? Long
Term Bulls are stronger or Bears?
2. 20EMA, & 13EMA: Analyze the trading
timeframe (minor structure). When to enter
a trade and how to manage it? Short Term
Bulls are stronger or Bears?
Points to consider:
1. If an EMA is flat, it's not a valid S&R and
we expect the price to break it easily. If not,
it'll act as a strong S&R and we expect a
strong movement after Pullback on it.
2. Based on the period of Flat EMA, the
fluctuation around it could be big and
bigger. It means, a flat 20EMA has a
smaller range of fluctuation and shorter
duration of ranging market around it, in
compare to 200EMA which generally is
wider and longer.
3. If EMAs are close to each other, cannot
act as S&R. Only when there is some
distance between them we can see them
as S&R that can encapsulate price between
them for a period of time.
Here we see a strong bullish entry after
hitting Flat 200EMA and 50% LTP If cross
and closed above all EMAs, a Pump is in
hand!
To be continued..
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