Just a quick question. I like the approach of a confirming
candle in terms of what you have referred to before with the 9EMA.
Do you have any thoughts on how to utilise the confirming candle in
a downtrend? Take sugar for example. The approach I take is to only
short confirmation candles below the 9EMA as the Moving average
structure is clearly downwards
At present, Sugar is giving a 9EMA confirmation buy signal.
Albeit with just this one indicator
Would be interested however to hear your views in the case that
there may be instances you take a trade from a confirming candle on
the long side of a downtrending instrument
Hello
Vimal- I apologize
I missed your post yesterday regarding sugar and the confirmation
method. The first thing however is that I don't see a confirming
buy signal over the 9 EMA because price closed above the 9 EMA on
the 18th and none of the subsequent candles have been able to take
out that candle's wick high, hence no confirmed buy.
In regards to the confirmation method - as I stated before while
it improves the trending capability of any indicator such as a
simple moving average (not just the 9 but you could use the 20 or
any MA), or MACD crosses look for a confirmed cross with price, or
Stochastics above/below 50% etc. However I think the real
piece of the puzzle lies in use these as tools with other things,
but not alone - you won't one indicator even if you use the
confirmation method that is consistently profitable. You
have to use a combination of things together such as trendlines,
patterns, elliot wave, price action. Try also using multiple
confirmation indicators together, I like the MACD cross confirmed
method in combo with trendline breaks and the RSI 50% confirmation
level to hold trades for longer - but that's hard to discuss here
without a bunch of examples. I think a combination of them
working together with some rules can provide good results, I have
been working on some ideas and I will eventually post examples when
I have something.
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Sugar 9EMA
Posted by vimal on 23rd of Jul 2013 at 05:32 am
Hi Matt
Just a quick question. I like the approach of a confirming candle in terms of what you have referred to before with the 9EMA. Do you have any thoughts on how to utilise the confirming candle in a downtrend? Take sugar for example. The approach I take is to only short confirmation candles below the 9EMA as the Moving average structure is clearly downwards
At present, Sugar is giving a 9EMA confirmation buy signal. Albeit with just this one indicator
http://stockcharts.com/h-sc/ui?s=$SUGAR&p=D&yr=0&mn=9&dy=0&id=p54869772431&a=301894461
Would be interested however to hear your views in the case that there may be instances you take a trade from a confirming candle on the long side of a downtrending instrument
Regards
Hello Vimal- I apologize I missed
Posted by matt on 24th of Jul 2013 at 10:17 am
Hello Vimal- I apologize I missed your post yesterday regarding sugar and the confirmation method. The first thing however is that I don't see a confirming buy signal over the 9 EMA because price closed above the 9 EMA on the 18th and none of the subsequent candles have been able to take out that candle's wick high, hence no confirmed buy.
In regards to the confirmation method - as I stated before while it improves the trending capability of any indicator such as a simple moving average (not just the 9 but you could use the 20 or any MA), or MACD crosses look for a confirmed cross with price, or Stochastics above/below 50% etc. However I think the real piece of the puzzle lies in use these as tools with other things, but not alone - you won't one indicator even if you use the confirmation method that is consistently profitable. You have to use a combination of things together such as trendlines, patterns, elliot wave, price action. Try also using multiple confirmation indicators together, I like the MACD cross confirmed method in combo with trendline breaks and the RSI 50% confirmation level to hold trades for longer - but that's hard to discuss here without a bunch of examples. I think a combination of them working together with some rules can provide good results, I have been working on some ideas and I will eventually post examples when I have something.