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Re: DXM11 5min chart/Lee

Thanks for the chart. Yes I've found there is a strong relationship with the 20ema (22 is almost identical.) What is especially notable that isn't often talked about is looking at price as being attached with a rubber band to the 20ema. You then look for a 'maximum stretch' away from the 20ema and when seen can expect price to 'snap back' to the 20ema just like it would stretching a rubber band too far and letting go. Price will always come back home to that 20ema. And if the 20ema is rising it will tend to act as support within a reasonable amount of leeway. And when the 20ema is falling price is below it and an extreme stretch will see price snap back to it and serve as resistance within a reasonable amount of leeway. This tends to work well most of the time and you don't need to see a crossover when the stretch is extreme for a trade or even a touching of the 20ema either. You only need to see an extreme stretch from the 20ema for a trade. You can use other filters to avoid getting in too early such as an angled trendline break or a 4ema cross over to suggest an end of the stretch. The cross over of the moving averages on all time frames means you only take the bull trades on the snap back to the rising 20ema support and only take bear trades on the snap back to the falling 20ema resistance. Check out a bunch of charts in ALL time frames to see this. I've found it is an important indicator that works consistently.

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Re: DXM11 5min chart/Lee