EMA + Bollinger Bands Strategy

EMA + Bollinger Bands Strategy with Example →

Author

Upsurge Club
December 22, 2023

Hey there 👋🏼

In today’s edition, we’ll learn about Super Trader Lakshya’s effective scalping strategy that combines 2 useful indicators…

EMA + Bollinger Bands

Exponential Moving Averages, referred to as 'EMAs,' are computed as averages of recent stock prices, with greater significance given to the latest data points. They often serve as effective support or resistance lines.

Another interesting indicator is the Bollinger Band, which generates overbought and oversold signals based on a calculation involving simple moving averages & standard deviations.

Let’s combine the 2 for an effective scalping strategy ⏬

An Effective Scalping Strategy

The strategy involves:

> Using 9-period and 21-period EMAs in a 15-minute chart
> Simultaneously, using a combination of Bollinger Bands and the 21-period EMA in the hourly chart

Here’s how you can create a long/short position according to the strategy ⏬

Long Trade:

1) In a 15-minute chart, one can enter when the 9 EMA crosses the 21 EMA from below

2) One can exit when the candles touch the upper Bollinger Band in the 1-hour timeframe

Short Trade:

1) In a 15-minute chart, one can enter when the 9 EMA crosses the 21 EMA from above

2) One can exit when the candles touch the lower Bollinger Band in the 1-hour timeframe

Note: Avoid taking trades when the EMA lines are flattish. Only initiate a trade when the lines are steep to avoid a false breakout.

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Example - Long Trade in BANKNIFTY

You can see how an entry is triggered as the 9-period EMA crosses the 21-period EMA from below in the 15-minute timeframe, and one can exit as the price touches the upper Bollinger Band in the 1-hour timeframe.

Learn to interpret a variety of indicators and build effective scalping & swing trading strategies in Super Trader Lakshya’s Swing Trading & Scalping Course for just ₹1499

Happy learning,
Upsurge.club

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