10-20-50-EMA Strategy

Daily Indicators:

Moving Averages (used for Trend)

• Moving Avg Exponentials
  • 10 (Green Dashes)
  • 18 (Red Dashes)
  • 20 (Magenta Dashes)
• Daily 14 ATR

IntraDay Indicators:

• Openning Range High and Low
  • 5 Min OR High and Low
  • 30 Min OR High and Low
• Simple Moving Averages
  • 4  (Green)
  • 9  (Red)
  • 18 (Magenta)
• Mov Avg Exponential–I only use this on the 5 Minute Charts
  • 60 (Dark magenta)
• Volume

Chart Time Frames

• I use the 60 min and the daily chart to find the opportunities and targets
• I use the 5 min for Entries and Exits

General Rules

1. Do your homework the night or morning before–dont make trades on the fly
2. Know your plan before making any trade
3. Know where you want to enter
4. Know where you want to exit if it goes against you (stops)
5. Know where your targets are so you know when to take some off the table
6. know your time frame–ie day trade, mini swing trade, swing trade,position trade
7. What is the trend of the current market/the stock you want to trade
8. Odds are with you if you are trading long on and up trending stock
9. Odds are with you if you are trading short on a down trending stock

Stock Criteria

• Price: 20 and greater
• Volume: >500,000
• Moving Averages
  • 10 EMA
  • 20 EMA
  • 50 EMA
• Moving Averages trending: 10EMA > 20EMA > 50EMA

Setups

• Setups are all trending stocks either up or down.  I don’t have a preference—and this is determined by the 10EMA>20EMA>50EMA
• After I see that the stocks are trending I want to find a good entry point and my entry points are of two types:
  • Break out from a consolidation
  • Or a pull back to some sort of support whether it be the 10 EMA, 20EMA or 50EMA
    • Once its hitting support I want confirmation of a trend line break before blindly entering

Entries

• After I have gone through the list of stocks meeting the criteria I will determine the best break out point / point of entry–the line I put on the charts is a general area–not a specific price
• I like to use the 5 min High and Low of the following days open to confirm the entry
  • For example
    • If current price is 24.99 and the entry point is 25.25 I will let the stock open the next morning and wait for the first 5 mins to finish
    • Once the first 5 min candle has closed I want the stock to break above the 5 min High and above the entry of 25.25 in this example
    • So if the stock opened and moved to 25.27 in the first 5 mins I would wait for the candle to close.  Once the candle closes the new entry would be above 25.27 plus a few cents.  This technique helps avoid the opening head fake as seen below
    • ATLS gapped open and moved above the entry price up to 32.49 which was the 5 min high (which also was the high of the day) and then reversed down to the 5 min low of 32.06
    • So based on this criteria the entry point on this day would have changed from 32.38 to 32.49 plus a few cents (32.53)—and  I would have not entered this as of yet

5 Min

Stops

• In short its Prior Days Low if Long and Prior Days High
• I like to give it a little wiggle room though so I would look at the prior days low then find the next Floor trader pivot below it and put my stop below that line
• Other times if maybe the stocks prior day high or low is far away I will look for other support areas to reduce the risk/reward