Deadly combination of 34 and 8

This is the next version of EMA crossover strategy.

Pl. note that this is not for Day Trading but amazingly effective for short-to-medium term trading.

The difference in this strategy w.r.t the EMA crossover technique discussed earlier is that here there are 3 characters instead of two.

1) EMA 34 line

2) EMA 8 line

3) Priceline

EMA 34 is effectively 1 month weighted average

EMA 8 is effectively 1 week weighted average

A) When price cuts EMA 34 from below, Buy.
Square off when it cuts EMA 8 from above.
If it again goes above EMA 8 , buy again.
.....

B) If the price cuts EMA 34 from above, Short.
Square off when it cuts EMA 8 from below.
If it again dips below EMA 8, short again.

The buy or sell has to be decided near market close so that it is confirmed that "the cut" has decidedly taken place.

Also EMA strategies work even better in trending markets. No harm in waiting till range bound movement.

However, I prefer doing it without bothering whether it is trending or ranging, otherwise you may miss a sudden big move.

Also, if 34ema and 8ema, both are very close to each other, a sharp movement of 8 ema and hence that of the price is likely in the next few sessions.

A strict stop loss of 8ema is advisable.

When 8ema and 34ema are these close, it is not unwise to wait a bit, but not compulsary if stop loss in place.