There are two functions:
- You can see clouds (green and red), which should be used for Intraday/ Swing Trading
- You can see a green, red and white line. This is a Trend filter.
- There are 3 parts to this: 13, 21 and 200
- These parameters are build on a Higher Timeframe and CANNOT be changed!
- When the line up is: Ema13 (top) above Ema21 (middle), and Ema21 above Ema200 (bottom), then we consider it a Bullish Trend and vice versa for a Bearish Trend .
- Also those 3 parameters are strong Support and Resistance Levels.
- Warning function: If price closes leaves the red and white Level, there could be a Trend-Reversal!
- There is a label showing the actual Trend, Green -> Bullish , Red -> Bearish
- The clouds are based on Ema’s
- A green cloud means, that we have a bullish trend , a red cloud means we have a bearish trend .
- The strategy is to only enter a trade, when price reaches the cloud or in the cloud and then moves outside of it.
How to combine those two:
1. Determine the Trend with the three Ema's (green, red, white Lines on the Chart)
2. If they are lined up (Example: Green above Red and Red above White -> Bullish )
3. In this case you will only take LONG trades.
4. Watch the clouds. We do not take trades on the opposite of what the Ema’s tell us. (On the Example, Bullish on Eagles, thus we take only trades on green clouds!)
5. Patiently wait for the price to move into a cloud. When the Price leave the cloud in the Trend direction, that when you enter.
6. Exit: You can either use the clouds, as Example if you are long and the cloud turn red -> Exit!. You can also use a Parabolic SAR as a Trailing Stop.
7. If the Price closes, as Example in a Bullish Market, below the white support level that would be a warning sign. A Reversal could happen soon!
Disclaimer: This is not financial advice. Please do your own research.