**** Scroll down for a less crowded picture ****
Since I get quite a few requests for an explanation of how to use this, I thought I would publish a chart with a few tips and explanations.
Heiken Ashi Candles + EMA (2) + EMA Offset (2) + SAR
To use this method for trading, imagine that the 2-EMA (yellow line) job is to "hold" the candle as the price goes up. When a candle body starts to fall through the 2-EMA line, it is a sign that price support is failing and a reversal is most likely to occur soon. It's called the "cupping" method because the end of the EMA line will often create a "cup" around the candle as the line elevates the price. The more formed the cup is the more likely the price is to go up.
Utilize other indicators in tandem to help confirm early warning signs.
Sometimes waiting for SAR confirmation can take too long as a dump can occur, watch the early warning signs/frequency of them.
Pay attention to the overall market trend, sometimes it's easy to get stuck on a smaller time frame without taking into consideration larger buying or selling pressures.
In tight sideways movement, use discretion with any tool and possibly use higher time frames.
If the market has been very volatile lately, you can try using EMA (1), or if its been somewhat slow/flatlining, use EMA (3). EMA (2) seems to be a good balance overall.
P.S. Sorry about the crowding of the bubbles, somehow crowded them a bit more after publishing them.
Since I get quite a few requests for an explanation of how to use this, I thought I would publish a chart with a few tips and explanations.
Heiken Ashi Candles + EMA (2) + EMA Offset (2) + SAR
To use this method for trading, imagine that the 2-EMA (yellow line) job is to "hold" the candle as the price goes up. When a candle body starts to fall through the 2-EMA line, it is a sign that price support is failing and a reversal is most likely to occur soon. It's called the "cupping" method because the end of the EMA line will often create a "cup" around the candle as the line elevates the price. The more formed the cup is the more likely the price is to go up.
Utilize other indicators in tandem to help confirm early warning signs.
Sometimes waiting for SAR confirmation can take too long as a dump can occur, watch the early warning signs/frequency of them.
Pay attention to the overall market trend, sometimes it's easy to get stuck on a smaller time frame without taking into consideration larger buying or selling pressures.
In tight sideways movement, use discretion with any tool and possibly use higher time frames.
If the market has been very volatile lately, you can try using EMA (1), or if its been somewhat slow/flatlining, use EMA (3). EMA (2) seems to be a good balance overall.
P.S. Sorry about the crowding of the bubbles, somehow crowded them a bit more after publishing them.