when everything else fails, try this trading technique...

I have seen many people try many trading methods.

Ofcourse, I know many who trade without any method but i don't consider them as serious traders).
Some of them are very successful but many are not.

It is these majority for whom i write this post.

If nothing else is working for you (due to ABC reason), try this basic but powerful trading technique.

I call it "EMA Crossover Switching"

I learnt the details of this long time ago but somehow in the rush of learning more and "better" and more "flamboyant" techniques, i somehow forgot to use this tried and tested effective technique.

Early this week, one of my friends in Mudraa (Dr.Ravi) asked for my opinion for this technique which he had been using since long. It was then that i remembered this brilliant technique.

This technique is very simple.

"Buy when the faster EMA (Exponential Moving Average) cuts the slower EMA from BELOW and sell when the faster EMA cuts the slower EMA from ABOVE."

If you know just this one technique and STICK to it, you won't need any other technique in life, take my word for it! It will make for you any amount of money you can wish!

This technique is very safe.

The beauty of this technique is that it has in-built Stop-Loss!

Also, amazingly, "patience" is also in-built!

Only condition, and this condition is a matter of life and death (of profit), that use switch on/off very fast the moment faster EMA crosses the slower EMA (by switch on/off, I mean changing your position from being long to being short.

This is a full time strategy. Don't use this as a stepny technique. You may crosscheck your decision of going for the trade according to this EMA crossover technique with max 1 or 2 more logics (be it RSI or Support-Resistance etc.).

Also, while using this technique, don't leave the table with open position.

Sometimes, you will feel that you have had to do the switching too often too much. Don't worry. Such condition will come for a small time during range bound movement of nifty.

This is an emotion-free technique.

Don't ever be defensive or complacent about the simplicity of this technique. All deadly strategies are deceptively simple.

Just follow it. No questions asked. Like the army people. Do or die, don't say why.

Just a few suggestions:

Keep on experimenting with ema combinations.

For day trading 3 & 15 or 3& 10 is preferable.

For medium term swing trading (1month to 3 month) 3 & 5 or 2 & 5 look good.

Remember, ema lags the actual price movement.

It should neither be too tight that it vibrates like an ECG, neither should it be so wide that by the time you get onto the train the train has almost reached the destination.

Also, as an advancement to this technique:

You can prematurely buy even before the faster EMA cuts the slower one from below WHEN you see that the faster one has started to turn up whereas the slower one is still moving in the same direction.

Similarly, you can prematurely short even before the faster EMA cuts the slower one from above WHEN you see that the faster one has started to turn down whereas the slower one is still moving in the same direction.

Once in a while , this advanced step can be a bluff, but generally, i have found it to be right.

This Technique is deadly, all u need to adjust or experiment is the ema combination.

This technique can't fail. Back test this technique thoroughly before applying. One of the good sites where it can be tested on almost live graphs is (http://www.google.com/finance?q=NSE:.NSEI)

If ever you lose more than a small amount, the problem will be in your execution and not with the technique.

I have thoroughly revisited the strategy.

It is the most effcient and fail-proof technique.

It works best for nifty. In high-beta stocks, the response time has to be damn fast!

No doubt people may say it is not glamourous (but i find it glamourous).

Stick to it. We are in the money-business, not glamour-world!

This technique is so shamelessly consistent that it brings tears of joy in my eyes when i see the profits trickle-down effortlessly and endlessly!