EMA AND ENGULFING CANDLE

EMA AND ENGULFING CANDLE



VARIABLES

Slow EXPO Moving Average X

Fast EXPO Moving Average X

Fibonanci value of 1.127 or 1.414

A fibonanci value is X

Each trade is 1% of equity

Profit is Risk:Reward (RR=X)

A notification sound


CONDITION 1 FOR A TREND

First the price must be in a trend.

Price value must be higher than fast EMA.

Fast EMA must be higher than slow EMA.

There must be at least two candles close prior to the pullback.

There must be two consecutive candle low and close prices must be greater than the value of the Fast EMA which MUST be greater than the Slow EMA.
 

CONDITION 2 FOR A BUY TRADE

Then EA looks for a pullback

Price must close or open below the fast AND above the slow EMA.

OR

Price must close or open below the fast AND below the slow EMA.

AND

The value of the fast EMA must remain greater than the value of the slow EMA.

If the value of the fast EMA is greater than the slow EMA is false, EA stops looking for buy trades.


CONDITION 3 FOR A BUY TRADE

If pullback condition is True

Given the fast EMA is greater than the slow EMA

Given there are two consecutive bearish candles

Given the most recent is engulfed by the previous candle (wick to wick)

Given the most recent is not closed beyond the fibonacci extension level of (1.127 or 1.414) of the previous candle

Given the next candle is a bullish engulfing candle

OR

A bullish candle that closes above the open of the previous bear candle


CONDITION 4 FOR TRADE EXECUTION

Then we have a valid trade setup

SL is the most recent low of the last five candles.

TP is Risk:Reward (RR=X)


Each trade is 1% of equity


EA takes a trade

And gives a notification sound