This is a good way to enter momentum in the trend or join the trend. by either using a cross over as a signal or waiting for a pullback. as seen on this quick backtest utilizing this method would have enabled you two entries on gold this week.
Yesterday analysis playing out nicely. We have now entered as planned on 137.200 with a 20pip stop loss. The plan is to hold the trade for full 4 days for R:R of 1:8. Please check out my analysis yesterday for this.
I don't use indicators, they're not my style, they lag, they repaint; and in my opinion they don't work.
The 200 EMA on DAILY can be useful because of how slow it is. We can use it to filter the direction of which way we trade.
Price ABOVE 200 ema = ONLY BUY
Price BELOW 200 ema = ONLY SELL
Then drop timeframes for your entries via your strategy whatever that...
Many a trader will have made their best analysis based on information at the time and then taken an entry position, only to find that the market does something unexpected. Price may move violently in the wrong direction i.e. not the favoured direction and comes close to a stop loss or actually stopping out the position for a loss. Now with hindsight a trader feels...