Yup, you got me. There’s no such thing. I just made it up. I have a fondness for using Exponential Moving Averages in my trades. The apple of my eye: the 4-day EMA .
What is the EMA Flight Cycle?
It is composed of three parts:
1) The RSI Bullish Divergence – initiates the cycle. The presence of the RSI bullish divergence is a prerequisite for the 4-day EMA Flight Cycle.
2) The Runway (4-day EMA ) – After or during a bullish divergence, price steps on top of EMA 4. Prices must close on top of 4-day EMA for a period of at least 3 days. When that happens, it is time to make an initial BUY. A solid confirmation for this buy is when EMA 4 and EMA 8 crossover on top of EMA 21. Additional buys could be made here.
3) The Flight – Occurs as buyers become more aggressive and a price spike occurs. This spike pushes the price away from the 4-day EMA . The post-action is a return to the runway in terms of a consolidation in price or in time.
The cycle could occur over and over again, and the prices must stay on top of the 4-day EMA all throughout. You know the cycle of cycles has ended when the price drops below the 4-day EMA . By then it’s time to SELL.
Here is an example of one completed cycle: BEL
Here us another example showing two completed cycles: YEHEY
Another example showing a cycle of cycles: MIC
One last example: EMA Flight Cycle in the making: DAVIN