Summary of "After 10 Years, I Found the Perfect EMA Settings! It Shows Exact Signals!"
Strategy overview
A trend-following, price-action entry method using two 3-EMA ribbons (short vs. long) to identify trending markets, wait for pullbacks, and enter on a break of the prior swing. Emphasizes layered confirmation and strict risk management (1% rule, 2:1 reward:risk).
Layered confirmation: ribbon separation → pullback to 89 EMA ribbon → break of prior swing (candle close) → entry.
Instruments & indicators
- Exponential moving averages (EMAs)
- “Moving average ribbon” indicator (used to overlay EMA ribbons; commonly available on platforms like TradingView)
- Price-action signals (swing highs/lows, candle closes)
- Risk-management rule referenced: 1% rule
Applicable markets
- Generic price-action/trend strategy — no specific tickers, assets, sectors, bonds, crypto, or commodities were mentioned.
EMA settings and visuals
- Two ribbons, each composed of three EMAs:
- Short ribbon (white): 13 EMA on High, Close, Low
- Long ribbon (orange): 89 EMA on High, Close, Low
- Styling recommendations:
- Increase line thickness
- Set colors to white (short ribbon) and orange (long ribbon) for visibility
Step-by-step framework (how to use the ribbons)
- Add the two 3-EMA ribbons:
- Ribbon A (white): 13 EMA (High, Close, Low)
- Ribbon B (orange): 89 EMA (High, Close, Low)
- Interpret ribbon relationship:
- Overlap between ribbons → market is ranging / non-trending
- Ribbons separated → trending market
- White ribbon below orange ribbon → downtrend
- White ribbon above orange ribbon → uptrend
- After confirmed separation, wait for a pullback to the orange (89) ribbon.
- Identify the relevant prior swing point before the pullback:
- Downtrend (short): mark the lowest low prior to the pullback
- Uptrend (long): mark the highest high prior to the pullback
- Entry confirmation:
- Short: enter when a candle closes below the marked prior swing low
- Long: enter when a candle closes above the marked prior swing high
- Place stop and target:
- Stop loss: beyond the white (13) ribbon (above for shorts, below for longs)
- Take-profit: at 2× the risk (R:R = 2)
- Manage the trade and monitor trend:
- If the white ribbon moves into the orange ribbon → signals weakening
- If the white fully crosses through the orange → possible trend reversal
Risk management & position sizing
- Use the 1% risk-per-trade rule (risk 1% of account per trade).
- Position size should be set so that stop loss equals 1% risk; take-profit is set at 2× that risk.
- The presenter stresses proper risk management and that the strategy is not infallible.
Behavioral / confirmation notes
- The method relies on layered confirmation: ribbon separation, pullback to the 89 EMA ribbon, then price-action confirmation via a candle close beyond the prior swing level.
- Partial intrusion (white moving into the orange) indicates weakening but not necessarily a trend change unless the white fully crosses.
- Final confirmation is price-action (a close beyond the marked level), not only ribbon position.
Performance, limitations & cautions
- Presenter claims the method finds high-probability setups but acknowledges false signals will occur.
- No claims of a 100% win rate.
- Emphasis on managing risk (1% rule) and accepting occasional losses.
Other resources & disclosures
- Presenter authored a book: “The Arts of Price Action Trading” (link referenced in video description).
- A separate risk-management guide and other links were referenced in the video description.
- No explicit “not financial advice” phrase shown, though the presenter warns of false signals and stresses risk management.
Presenter & tools referenced
- Unnamed YouTube host / video creator (also the author of the referenced book).
- Indicator referenced: “moving average ribbon” (platform implied but not explicitly named).
Category
Finance
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