Dynamic Trend Following

Trading turns on a single timeframe

In the first sections of the course, we have looked at trading EMA9 trends, reversals and break outs. One specific part of the Definitive Control Model instruction was that when we take the first M2 DEM entry, we have to scalp it into M5 EMA9 because it is highly likely to reject price.

When EMA9 trends end, there is a standard sequence to monitor for scalps or sniper entries as price seeks EMA50 and we should look for a continuation attempt there, after which EMA9 would have to lead again. I like to call this predictable game of ping pong the EMA Dance. These sequences play out ever single time, almost with clockwork precision.

In short, this is how trend works:

• When a trend ends, price crosses EMA9 and pulls back to the mean;

• When EMA21 is breached, price seeks EMA50;

• EMA50 rejects price for a bounce;

• From this bounce, we can now look for continuation, reversal, or consolidation.

The EMA Dance

One of the finest concepts of my system, often compared with Wyckoff distribution, but framed along repeatable EMA parameters.

The EMA Dance holds the simplest key to market behaviour and draws from the simple fact that when an EMA9 trend ends, price seeks EMA50, rejects (either below, at, or above), then attempts continuation, for why a new EMA9 trend has to confirm. If that EMA9 trend fails, we can short back down to the EMA50 where sellers will attempt a break down. When that fails too, price will now be in balance.

Here are a few illustrations: