TiTTs2 – 8 EMA + Close and Fibonacci Moving Averages
This is a study of using TiTTs2 on the 9 September 2022. In this trade, we highlight the being able to read the charts by watching the candle close and its position relative to the 8 EMA. The idea is that we are using the 8 EMA as a pointer. If the candle close is above the 8 EMA, it has a bullish bias and if the candle close is below the 8 EMA, it has a bearish bias.
Then on our charts, we have the Fibonacci moving averages and the ATR Trailing Stop Loss. Our Fibonacci moving averages are 8 EMA, 21 EMA, 34 EMA, 55 SMA, 89 SMA, 144 SMA and 233 SMA.
In the chart below, when the market opened at 9:30 am ET, it is below the moving averages and showed that it had a bearish bias and it refused to go down. The yellow dots represent higher than average volume and which is typical during the first 30 minutes after market Open. That gives us a clue that the Bulls are strong and are out in numbers.
Chart 1: 9 September 2022 – 1 minute chart showing the Entry points and also the possible Exit points
The next thing that happened at 9:32 am ET was that the candle closed above the 8 EMA (bullish bias)and the candle Close was above the 8 EMA and 21 EMA. Then we had the candle Close above the 55 SMA which coincide with the 8 EMA crossing above the 21 EMA, 34 EMA, 89 SMA and 144 SMA. The Close remained above the 8 EMA and the 8 EMA continued its upward move by crossing above the 233 SMA and two candles later, it crossed above the 55 SMA. This is a very bullish move but yet the candles were volatile and remained range bound.
It was at about 9:57 am ET that the upward breakout move happened and the moving averages were nicely stacked in order of 8 EMA, 21 EMA, 34 EMA, 55 SMA, 89 SMA, 144 SMA and 233 SMA. This upward move ended at 10.10 am ET.
Subsequent to that, the market pulled back and was volatile. The Close and the 8 EMA became intermingled with the other moving averages and essentially was trapped between the ATR Trailing StopLoss above it and the 233 SMA below it until it broke out above the ATR Trailing StopLoss at 12:35 pm ET.
Something to note it that in a pullback in an upTrend, we exit a trade when the candle close below 21 EMA. It is likely that the 8 EMA is still above the 21 EMA at this juncture.
Likewise, in a Bearish downtrend, we exit the bearish move when the candle close above the 21 EMA and the 8 EMA is still below the 21 EMA.
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