I have never looked at it this way but from the fact it is based, it is obvious that if 5 hour ema moves above 5 day ema, it has to be strength. Now the most important question is: Is it tradeable..? How much lag in time it leaves you and how far away from the bottom or top it generates a buy/ sell. Have you back tested over a period of ...2 years.
When the larger trend is still in force but the short term is "Overbought with negative divergence", it is time to do partial profit booking. Full booking may be done when the larger trend is overbought with negative divergence and your system suggests you to initiate a SELL.
That is "three questions in one"... I have a system that incorporates Macd-fast & slow, stochastics-5 & 14 periods, Pivot points showing critical highs and lows, Channeling, Tech. table with three important emas - close, high & low to show the trend and its strength & weaknesses as well as their momentum and finally Elliott wave analysis - a labeling system which maps out the price advancement and retracements and reversals in an orderly way. I have summarised these and presented it in "Technical analysis" under "LABELS" in my blog.
5. I wanted to do Intraday trading alone. I look into MACD first to check whether its bullish or bearish in a Daily Chart, Next I confirm with Stochastics and RSI. After in Intraday, I check in Hourly chart for Oversold and overbought using RSI and next i enter trade in 5 minute chart but manytime i enter trend is reversing , I cannot find perfect entry point always there are any problems. Sir, Hope you will guide me How I can do good trading with some strategy.
In a trending market, buy into "every 3 wave declines/ retracements" for better entry & hold.
Once the trend shows fatigue with "overbought readings", study the price chart, especially the hour chart for "Price clusters" to understand the likely supports and resistances and position yourself to trade the ranges.
Never trade based on indicators as they only indicate the likely direction but can reverse suddenly too. By studying the "price clusters", you will be able to trade with ease. Try this - you will find amazing results. And when you do, keep your feet firmly on the ground and head down with emotions under check and stay away from market men. Emotions can easily unsettle all that you have built..
Trading is just like any other business - more the secrecy, more the success.
I am taking some time off from active blogging due to family and work commitments. This journey has been truly a great learning and evolving experience under your guidance and cooperation from friends. My sincere Thanks.
Dear Aar Vee,
Solitude/ seclusion brings out the best creative energy. Take care of your other commitments, dear aar vee and when you find some interesting observations to share with us, the doors are always open and don't take too long.