RT Concepts

Using EMA clouds to identify the type of reversal.

Reversal triggers or ‘RT Entries' come in many varieties, and make for the most versatile concept in my tool box. They all differ somewhat in terms of parameters, and to highlight that, I give them different names. But technically, they are all the same. The parameters simply depend on what price is doing, where the reversal is setting up, and which EMA cloud is leading.

To summarise before we dive in, an RT setup always forms in this specific way:

• Trend;

• EMA Box (Imbalance) to test EMA9;

• Attempt at continuation of trend (EMA Box breaks down or out);

• Price retests the EMA Box boundary and gets back inside the box.

The last step gives the RT candle. The next candle gives the entry, or not.