Now supposing.... the 5 min stoch is in neutral zone and ema already crossed. what signal will we take to long. Is it when 5 min stoch crosses above in 5 min ( as ema already crosses long before ) or shall we wait for ema to cross below and then again when they will cross above.. we will enter. Hope I am able to convey what I mean.
Thanks
Manoj
Yes...
You should only take a trade when ema crosses right at the time when you are planning to take a trade. I was also confused like you were..
But pride and ankit was able to clear me.. Thanks to both.. look at these
Here are the possible positions of higher time frame momentum:
1. Bullish and not Overbought: Consider only long positions following the smaller time frame momentum bullish reversal.
(Bullish and oversold comes under this as well).
2. Bullish but Overbought: The upside should be limited in this case, and no new long positions should be taken.
If the higher time frame is overbought, the upside is usually limited before a momentum high is made, and there is not enough profit potential to execute a new long trade.
3. Bearish but not Oversold: A short position setup follows a smaller time frame bearish reversal.
(Bearish and overbought comes under this).
4. Bearish but Oversold: The downside should be limited and no new short positions should be taken.
You can use this strategy with any trading plan and is good with any two time frames of data.