This is a custom ema cloud script with a 5/12 cloud and a 34/50 cloud.
Personally, I used to trade with the 20 ema and 50 ema, but wanted something with a little more robust. These clouds are especially great for the first hour of market open since strong bullish stocks that have gapped up overnight tend to follow these trends.
For example, Tesla opened above the clouds and used them as support before running all day.
Hey, This script looks good. I am trying to enter few things daily and it works most of the times. But can you give more inputs like
1) How do we select a stock if it is going to follow the cloud? Is it based on?
2) Sometimes it opens above the cloud when the market opens, but it reverses. So are we waiting for any number of candles to enter?
Any more inputs on how you are using this will be helpful, as at EOD I see when the day is done it looks good that it followed the cloud, but at beginning of the day I am a bit confused about what to be focused on for entry and exit.
welcometochristown
⋅
@granolabar_trades Can you explain why you use 5/12 and 34/50 over something like 5/10 and 20/50?
granolabar_trades
⋅
@welcometochristown, to give credit where credit is due, I saw that Ripster (really good trader who posts on Twitter) used this system with the 5/12 and the 34/50 clouds to trade. I ended up really liking it, but I just couldn't find a script on TV that was just a simple clouds. I just coded this so that there is a very simple and clear cloud system out there. If you wanted to know the reasoning behind the choice of EMA length, you should probably dm Ripster directly on Discord (ripster#2434).
If I were to guess, I'm assuming the 34 ema comes from forex trading where is seems to be a popular choice for defining overall trend. The 12 and 26 EMAs are common short term EMAs, and you may recognize them as the most common MACD lengths.
1) How do we select a stock if it is going to follow the cloud? Is it based on?
2) Sometimes it opens above the cloud when the market opens, but it reverses. So are we waiting for any number of candles to enter?
Any more inputs on how you are using this will be helpful, as at EOD I see when the day is done it looks good that it followed the cloud, but at beginning of the day I am a bit confused about what to be focused on for entry and exit.