EMA’s

How to use EMA’s as confluence with Price Action

By EMAs Don’t Work 3/2/18 Forex Family ©

 - INTRODUCTION -

The purpose of this document is to further advance your knowledge on EMA’s (Exponential Moving
Averages) – If you didn’t know the definition of this. You are not ready for
this.

Guess half of the people will still read this so let’s carry on.

The main area of focus is how to use EMA’s as confluence with Price Action
and not just crosses which is what the strategy was primarily focused around.

So first of all you need to know price action!

On price action I am more focusing on the topic of support and resistance, supply and demand, zone
to zone whatever you wish to call it. (I will not focus on what it is, but how I use it. There are plenty of
resources out there to cover this topic)

You also need to understand how EMA’s react with price (this comes from chart time it’s harder to
explain as EMA’s can show a different bias on each timeframe)

Remember to take your time, study and practice a lot before exposing yourself to the market with new
ideas which you haven’t used before. Be prepared.

I hope this gives you a better understanding of price movement and on your entries.

DISCLAIMER:
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all
investors. Before deciding to trade foreign exchange, you should carefully consider your
investment objectives, level of experience, and risk appetite The possibility exists that you could
sustain a loss of some or all of your investment and therefore you should not invest money that
you cannot afford to lose. You should be aware of all the risks associated with foreign exchange
trading, and seek advice from an independent financial advisor if you have any doubts.

To anyone who decides to be selfish and profit from selling this document. Please have
some moral decency and respect for other people’s effort. I still know some of you are heartless
and the greed will carry this on, so as a humble request any funds you do get from
unauthorised distribution please donate some to a respected charity.

#TheForexFamily
 1 Thought
Process
Breakdown
3
────
2
1. Notice the
structure and
momentum

────

2. Break and
retest of zone

UJ – 5M ────

3. Notice the
spike to the
This is an example of why or how you can predict a fakeout cross
same zone then
Firstly during this time period (look at the date of the PDF before you DM continues with
me). During this time period UJ was hugely bearish. momentum
most likely a
So this cross would be counter trend (Even if it wasn’t look at the spacing stop hunt
and confirms There isn’t any so it’s a bad cross overall) Looking at the 200
EMA and general price action we can see the bearish structure. ────
Look at how it breaks the zone. Retests and continues down. 4. Go with the
obvious
(Look at that cross at the bottom right that’s a much better formed cross
momentum
with confirms.) Then you have your normal things such as EMAs acting as
present in this
dynamic resistance.
example.

IMPORTANT:
Don’t forget price
action. Not every
cross is a valid set
up.

Patada
 Thought
Process
Breakdown

────
4 1. Failing to

3 breakdown so
bullish bias
develops

2 ────

2. EMA magnet
which formed
into a 14/50
1 cross.

────

GBPJPY - 5M 3. Break and

retest of zone
This is a very clear example of EMA confluence with price action.

Firstly it was unable to breakdown. This was also towards the end of the ────
week market close. Around a 4hr/daily support area so I didn’t think it 4. 14/200 cross
would break at that particular time. & another
So we see price moved away from the EMA and went back up for a retest

magnet. Price clearly very bullish closed above the EMAs (dynamic
support). It retested and spaced out which shows a valid cross. You could
enter at the 14 EMA with tight SL for aggressive entries for TP at the 200
EMA. Or wait for the minor resistance zone at area marked 3 to be broken IMPORTANT:
for more entries. This consequently followed by a further bull move for the Candle closes are
14/200 cross. insightful especially
for GJ which moves
EMAs acting as dynamic support. And if the 3rd entry scares you because
viciously. Don’t be
200 EMA is close that range was still 9-12 pips because GJ is on some
afraid of missing
steroids with the pip count.
pips. Enter with
precision and
patience.
 Thought
Process
4 Breakdown

────

1. Failing to
breakdown. So
waiting for
breakout
3
────

2. Breaks up
2 and closes
above EMAs.

1 ────

3. Break of
minor
resistance zone
XAUUSD - 5M _____
Gold is a very volatile mover so it’s important to positon yourself correctly
as it moves very liquidly. Might go for your SL before the right direction. 4. Exhaustion &
So again patience and risk management is key if you are willing to take TP

some drawdown.

So around area marked 1 we can see its making touches to a support

zone (200 EMA outlines this). Its failing to breakdown so im waiting for a
IMPORTANT:
breakout to take positions. At area marked 2 we see it closed above the
Look left see how
EMAs which start spacing out. Would I take entries here? Probably not
price likes to move
unless I have a tight SL (under the 14/50 EMA).Why? Because id still be
from one area to the
looking for a breakout.
next.
Area 3 is a much better entry as we can see a strong bullish
Gold is vicious
breakout from that consolidation zone. Area 4 we can see its
always trail with SL
now failing to push more so look to secure or trail profits.
once in profits.
 5
Thought
Process
4 Breakdown

────
3
2 1. Cross &
respect of

1 support

────

2. Ascending
bullish

EURUSD formation

────
Go through the picture and notice all the zones, the wicks, exhaustion,
3,4,5 = retest
trend lines whatever you wish to use. I have only plotted zones of
and push up
relevance to me as I know people have slight variations to this.

1. 200 EMA acting support. Look at the wicks all pointing down. This is ────
a hint to say price is failing to break down so we are looking to go
up.

2. Towards this point I’m seeing an ascending formation. Price breaks

up above both EMAs. Not a clean cross however. IMPORTANT:
3. Look left and see its reached zone. Resistance has become support Look left see how
and it pushes up again. price likes to move
4 is a similar support formation from one area to the
Notice at 4 and 5 we see the candles don’t really push far
next.
down and close quite close to each other. EMAs slightly
messy too. Indicating low volume however the 200 EMA is
still pointing up so the bias is still bullish. Look where prices
closes. Just because
Take a look at this and see where you would enter? it broke the emas
Where your TP and SL would be? doesn’t mean trend
is changing.
What does Price action tell you? What do EMAs tell you?
Trend and momentum identification!

Remember all the times I talked about the direction they are pointing? The steepness of the EMAs?
The way they have spread out?

Real key and simple things that help gauge anticipated price movement. If you forgot this and didn’t
apply it to all the above examples.

Go through it again and see how much easier things look

Keep it simple! Don’t overcomplicate shit!

You don’t need any books to teach you some missing miracle. It really all is chart time and nailing
down analysis.

__________________________________________

So that is all folks!

Some parts of this were re-used from the first one just to hit home that key basic knowledge.

I hope this was useful in giving you a better understanding of how to use price action with EMA
confluence.

I’m hoping to keep this as a monthly or bi-weekly edition depending on how people take it and my
own schedule. So expect more of the same thing. A couple example trades with a specific topic being
covered. I have many ideas but I’m open to whatever people demand with popularity. I’ll keep it short
and concise. No novels!

So in the next one I will dissect my favorite type of set up and somehow make this into some sort of
flip eBook so it looks pretty lol
 - QUIZ -

Quiz!

1. What EMA’s purpose is?

2. What attributes can MA’s have?

3. What else should you use to factor in with trades?

4. What does a cross indicate?

5. How do I deal with what a cross does?

6. Timeframe best for zones?

ANSWERS
1. Trend and momentum identification

2. Trend, Momentum gauge, dynamic support and resistance, trendlines

3. Take into account the following to :

a. Session time
b. Volume
c. The range between major zones for risk to reward
d. The bias of the trend.
e. Your range of possible movement.

4. The formation of a new trend

5. Read the whole document including the first one again!

6. Higher timeframe is strongest however if low volume I will just watch price zones form on
the lower timeframe also like 15m or lower.