TRADE STRATEGY
Two indicators are used to determine buy and sell positions in trading. EMA settings are adjusted accordingly, with stop loss and target set in place for both positions.
How to Use the Vervoort Heiken-Ashi Indicator with 2EMA for Successful Trading
Have you been struggling to find a reliable indicator to guide your trading decisions? Look no further than the Vervoort Heiken-Ashi Indicator paired with the 2EMA. In this article, we will discuss how to use these tools to take profitable buy and sell positions in the market.
Understanding the Vervoort Heiken-Ashi Indicator
The Vervoort Heiken-Ashi Indicator is a variation of the classic Heiken-Ashi candlestick chart that allows traders to easily identify the trend of a market. Instead of using traditional candlesticks that show the open, high, low, and close of a price, the Heiken-Ashi candles use a modified formula that smooths out the price action.
The Vervoort version of this chart adds an additional layer of information by highlighting when the trend is changing. It does this by coloring the candlesticks red or green depending on whether they are bearish or bullish, respectively. When the trend switches from bearish to bullish, the indicator will turn from red to green, indicating that it’s time to consider a long position.
Setting Up the 2EMA
The 2EMA, or two exponential moving average, is another useful tool for traders. The exponential moving average is a type of moving average that emphasizes more recent price action. In the case of the 2EMA, it uses the 21-day and 9-day moving averages to create an intersection point that traders can use as a signal to take action.
To set up the 2EMA correctly, you will need to enter its settings and make the following changes. First, change the period to 21 or the timeframe you prefer. Second, duplicate the indicator and change the period of the second one to 9. You should now have two exponential moving averages on your chart.
Taking Buy Positions
Now that you have both indicators set up, let’s walk through how to use them to take profitable buy positions in the market. The first condition you will need to meet is that ema21 meets or crosses ema9 from bottom to top. This crossover indicates that the trend is shifting upwards.
At the same time or no more than one candle before the crossover, you will need to ensure that the Vervoort indicator is red. This coloring confirms that the price action is currently in a bearish trend, which is about to switch to a bullish trend.
Once you have confirmed that both conditions are met, you can enter a buy position. It’s essential to set a stop loss slightly below the previous resistance to protect your investment. Additionally, you will want to have a target of two in mind when exiting the trade.
Taking Sell Positions
The process for taking a sell position is quite similar to that for taking a buy position. However, in this case, the condition is that ema21 meets or crosses ema9 from the top to the bottom. This crossover signals that the trend is shifting downwards.
Along with ema21, you should be mindful of the Vervoort indicator and wait for a green candle to appear. This coloring indicates that the price action is currently in a bullish trend, which is about to switch to a bearish trend.
Once you’ve confirmed that both ema21 and the Vervoort indicator are giving you the signal to sell, it’s time to enter the trade. As before, set a stop loss slightly above the previous resistance to protect your investment. You will also want to have a target of two in mind to guide your exit strategy.
Conclusion
By combining the Vervoort Heiken-Ashi Indicator and the 2EMA, traders can increase their chances of making profitable trades. Remember to look for the crossover of ema21 and ema9 along with the color of the Vervoort indicator to guide your buying and selling decisions. Always set your stop loss and target, and don’t forget to manage your risk. With this approach, you’ll be well on your way to successful trading.
