KOBAS STRATEGY
Timeframe: Any (but I recommend from 15 minutes chart and above)
Indicators: Moving averages (Exponential)
i. Period 5 (Yellow)
ii. Period 10 (Magenta)
iii. Period 15 (Red)
iv. Period 65 (White)
MACD (Default settings)
You can also change the colors to Red and Dark Turquoise as shown
below.
Entry Signals
The signals are classified into 5 sentiments for the indicators
i. Bullish
ii. Bearish
iii. Consolidation
iv. Bullish Consolidation
v. Bearish Consolidation
Which means that the moving averages and the MACD can give signals based on any of
the 5 sentiments.
Although, we have four Exponential moving average indicators but, I will classify them
as two different indicators i.e, 5, 10 and 15 as one and then 65 as another indicator for our
signals.
We now we have:
Indicator 1 - EMA (5, 10, 15)
Indicator 2 - EMA (65)
Indicator 3 - MACD with Red and Dark Turquoise colors.
SIGNALS FOR EACH INDICATOR
Indicator 1: Whenever there is a crossover of the three EMA (5, 10, 15), then wait until
they split distinctively according to the periods or colors as shown on the chart, then a BUY or SELL is confirmed depending on the direction at that point in time (Bullish or Bearish).If they are all together, that means consolidation.
Indicator 2: Check the angle of the 65 EMA
Upward angle: Bullish (BUY)
Downward angle: Bearish (SELL)
Flat: Consolidation (NO TRADE)
Indicator 3: MACD
Red line is the MACD signal line
Dark Turquoise bars are the MACD cloud
Zero level (0.00) separates BUY/SELL regions
If the Red line is above the zero level (0.00), that means BUY (Bullish) but if it is
below the zero line it means SELL (Bearish).
If the Dark Turquoise bars are above/below the zero line, that means BUY
(Bullish)/SELL (Bearish).
If the MACD signal line (Red line) is inside the MACD cloud (Dark Turquoise),
above/below the zero (0.00) line, that means BUY(Bullish)/SELL(Bearish).
If the MACD signal line (Red line) comes out from the MACD cloud (Dark Turquoise) above/below the zero (0.00) line, that means Bullish consolidation/Bearish consolidation.
Now, let me bring everything together. You must make sure that you consider these five
sentiments before taking a trade:
i. Check the three EMA (5, 10, 15).
ii. Is the market trading above or below the white line (65 EMA)?
iii. Check the angle of the white line (65 EMA).
iv. Check if the MACD signal line (Red line) is above/below the zero(0) level
v. Check if the MACD signal line (Red line) inside the MACD cloud.
Let’s apply all the rules on the market and see:
As you can see on the chart above, the 3 EMA (5, 10, 15) separated (SELL) and the
candles are below the white line (SELL). The white line (65 EMA) was angling down
(SELL) and at the same time the MACD signal line (Red line) was below the zero level
(0.00) (SELL) and entering the MACD cloud (Dark Turquoise) (SELL).
For every signal, make sure the five sentiments shows BUY/SELL before you take a
trade.
Exit Signals
You can pullout from a trade when the MACD signal line (Red line) comes out of the
MACD cloud for short time traders or when the signal line crosses above/below the zero
level (0.00) in an opposite direction of our trade for position traders. Look at the chart
below: