In trading decisions, clear cycle positioning and explicit indicator signals are key to enhancing operational certainty. The logic of the indicators shared this time focuses on 'Mid-term Trend Anchoring + Short-term Signal Validation', suitable for investors seeking stable trend trading. The specific rules are as follows:
1. Core Cycle Positioning: Anchor 4 Hour Trend
Choose the 4-hour K-line cycle as the core observation dimension, as it can filter out the interference of short-term fluctuations during the day while timely capturing the turning signals of mid-term trends. Compared to shorter cycles like the 1-hour, the 4-hour cycle has stronger trend continuity, reducing ineffective operations from frequent openings; compared to the daily cycle, the 4-hour cycle can detect the budding of trends earlier, allowing for more space to seize entry timing.
II. Direction judgment basis: EMA moving average crossover determines the overall situation
Based on the crossover zone of EMA21 (21-period Exponential Moving Average) and EMA55 (55-period Exponential Moving Average), determine the daily trend direction.
EMA21 serves as a short-term trend line, reflecting the average price movement in the recent period, and is more sensitive to trend changes;
EMA55 serves as a medium to long-term trend line, representing the medium-term price trajectory, with stronger stability;
When the two moving averages form a golden cross structure of 'EMA21 crossing above EMA55', it indicates the daily trend leans towards bullish; when forming a death cross structure of 'EMA21 crossing below EMA55', the daily trend leans towards bearish.
III. Specific opening conditions: moving average direction + candlestick patterns double verification
After confirming the daily trend direction, further confirm the signal validity by combining the candlestick closing patterns to avoid being misled by a single indicator. The specific opening rules are as follows:
Long position opening condition: when the daily trend leans towards bullish (refer to the EMA moving average golden cross zone), and there is a situation of 'EMA21 moving average showing an upward diverging state + corresponding 4-hour candlestick closing with an entity bullish candle', consider opening a long position. At this time, the price aligns with the medium-term trend direction and has short-term capital entry support, making the probability of the daily trend continuing bullish higher.
Short position opening condition: when the daily trend leans towards bearish (refer to the EMA moving average death cross zone), and there is a situation of 'EMA55 moving average showing a downward diverging state + corresponding 4-hour candlestick closing with an entity bearish candle', consider opening a short position. This combination fits both the medium-term downtrend and has short-term selling pressure confirmation, making the continuity of bearish trends on that day more certain.
IV. Practical operational considerations
Avoid using this logic in the 'EMA21 and EMA55 intertwined oscillation' non-trending zone, as the moving average signals are vague and prone to false breakouts;
After opening a position, it is recommended to set stop-loss based on key support/resistance levels. For example, the stop-loss for long positions can refer to below the lowest point of the opening candlestick, and for short positions, the stop-loss can refer to above the highest point of the opening candlestick, controlling the risk of each trade;
If there is a special situation such as a gap up / gap down on the day, wait for the first 4-hour candlestick to close before judging the signal to avoid misjudgment caused by opening market sentiment fluctuations.
Finally, I look forward to everyone sharing their insights and thinking logic in the comment area. There is no right or wrong in trading; all is reference.