Let’s say I find a price chart where the common timeframe EMA is a UFO band. Based on the methodology, we are supposed to set-up a trade to trigger when price hits that band.
However, what if it takes a couple of days to reach the UFO band and, in the meantime, the EMA is no longer in the band? Does that happen often? Would we cancel the trade then?
You are spot on! If the EMA no longer lines up with the UFO, we would cancel the trade as it’s no longer meeting our criteria.
The way to avoid it happening too often is to place trades that are closer to you at the time. You can use AutoClimate to help you with that…
If the dot has a long line coming out of it, then current price is far away from the EMA (meaning by the time it moves into your UFO things are less likely to line up). If the dot has a short or no line coming out of it, then current price is really close to the EMA, meaning it’s less likely to change by the time it hits the UFO.
If that doesn’t quite make sense, I may do a Sharpening session on it this Saturday (24th July) so you can watch that or watch the recording 🙂