20 Gap Bar Buy and EMA Gap Bar Buy

20 Gap Bar Buy:

In general, it means the market has been above the ema for approx. 20 bars, and is now touching the EMA, so there will be buyers willing to buy (they consider it good value) compared to buying higher. 

a bar with the full body above, and tail below the 20ema?

generally people buy with limit order at the EMA, with a wide stop, and go for a scalp. A safer approach is to go on a smaller timeframe and see if there is a good reversal bar that you can buy. A lot of stocks have done it this month - They were touching the monthly EMA after 10+ months, and buyers came in and buy it at least for a scalp (look at aapl on monthly chart)

EMA Gap Bar Buy

This is the case where now you have a bull bar completely under the EMA for the 1st time in a long time. Its a show of strength on the part of the bears, but again you could buy this for one more attempt at a lower high esp. if there are no consecutive bear bars closing below the EMA ( which would be stronger show of strength by the bears).

I’ve found this setup to be hit-or-miss. Friday the 20 gap bar buy rallied 20 points. most other days last week it failed barely making a scalp.

Also remember: ”no perfect setups, if there were then nobody would take the other side”

I’m a pretty big sceptic of the 20EMA. I consistently make more money without it. I find it paralyses me. When I look back at charts at the end of the day I find the 20EMA was ignored far more than it was respected. In places where it’s respected, there’s almost always some other kind of S/R like a prior breakout point, final flag, measured move, or a tendline.

Maybe a controversial opinion but I’m doing this to make money and believe in removing all obstacles to that goal.

Thanks very much for the comments.  The confusion comes from the "Gap" part from the ema.  Sometimes there is a Gap away from the ema sometimes don't.

It would be great if Al could produce a detailed video about his viewpoints, trading with the EMA'(s). He has mentioned the EMA throughout the course and many other video's he made, also he has used (or uses) the 1Hr EMA 20 plotted on the 5 minute chart.

I also remember him stating in a video about using certain tricks applied with the EMA but he didn't elaborate on that in that particular video.

Perhaps if an Admin reads this, he could forward this suggestion to Al?

+1

This is a great idea.

Posted by: @danny-l

Thanks very much for the comments.  The confusion comes from the "Gap" part from the ema.  Sometimes there is a Gap away from the ema sometimes don't.

Don't get too hung up on Terminology.... "Moving Average Gap Bars" is simply a term that Al uses to define bars that are completely above or below the moving average for the first time in more than 20 bars. "Gap" refers to the fact that there's a space between the MA and the entire bar. 

It doesn't refer to a gap in the traditional sense which is usually a space between the open/close of adjacent bars - that traditional kind of gap is not relevant to this setup.  Al uses "gap" to refer to space between lots of things: current price and OHLC of previous bars, previous swing high/lows, moving average, trendlines.

You can call them 'moving average spacebars' if you want.  Its just a name.

Thanks Kevin, this clear my confusion.