Works Best in Trending Markets
| Strategy Type | Trend Following / Moving Average System |
| Market Outlook | Works Best in Trending Markets |
| Risk Profile | Defined by Stop-Loss Placement |
| Reward Profile | Unlimited in Direction of Trend |
| Time Horizon | Swing Trading to Position Trading |
| Indicator Type | Three Exponential Moving Averages (Fast/Medium/Slow) |
| Signal Type | Buy When All Three EMAs Align Bullish; Sell When Align Bearish |
| Primary Instruments | STI ETF, DBS, OCBC, UOB, SINGTEL, CapitaLand, Keppel |
| Trading Hours | 9:00 AM - 5:00 PM SGT |
| Recommended Timeframes | Daily for swing trading; Weekly for position trading; 4H for active trading |
| Currency | SGD |
| Default Settings | 5/13/34 EMA or 10/20/50 EMA - Popular combinations for SGX stocks |
| Liquidity Note | Use on liquid stocks for reliable signals |
| Typical Holding Period | 2-8 weeks per trade on daily timeframe |
Start with 10/20/50 - this is a balanced, widely-used combination. 10 is fast, 20 is medium, 50 is slow. Other popular options: 5/13/34 (faster) or 13/34/55 (slower). Choose based on your trading timeframe.
No. When EMAs are twisted or compressed, there's no clear trend. Wait for full alignment (Fast > Medium > Slow for uptrend) before entering. Trading without alignment leads to whipsaws.
Common options: 1) Below Slow EMA (gives most room), 2) Below Medium EMA (moderate), 3) Below recent swing low. The Slow EMA acts as major support in uptrends.
Triple EMA uses three separate EMAs of different periods (e.g., 10/20/50). TEMA (Triple Exponential Moving Average) is a single indicator using a formula (3×EMA - 3×EMA² + EMA³) to reduce lag. Different concepts!
Hold while EMAs remain aligned. On daily charts, trades typically last 2-8 weeks. Exit when Fast EMA crosses below Medium EMA (for longs) or when alignment breaks.
When EMAs are bullishly aligned, wait for price to pull back to the Medium (20) or Slow (50) EMA. When price bounces off the EMA with a bullish candle, enter long with stop below the EMA touched. This gives better entry price.
Generally yes - consistency helps. Use 10/20/50 on both weekly and daily. However, some traders use longer periods on higher timeframes (e.g., 13/34/55 weekly, 10/20/50 daily) for smoother weekly signals.
ADX measures trend strength. When EMAs are aligned AND ADX > 25, the trend is strong. When aligned but ADX < 20, trend is weak. Take larger positions when ADX confirms the alignment.
Converging (narrowing spread) EMAs indicate the trend is weakening. Momentum is slowing down. This is often a warning sign - tighten stops or prepare to exit. Full twisting usually follows.
No, Triple EMA is a trend-following system. In ranging markets, EMAs compress and twist frequently, generating whipsaws. Avoid Triple EMA trades when no clear alignment exists or when ADX < 20.
Adjust EMA periods based on volatility: Period = Base × (Average ATR / Current ATR). In high volatility, periods increase for smoother signals. In low volatility, periods decrease for responsiveness. Recalculate periodically.
Use spread = (Fast - Slow) / Slow × 100. Above 3% = strong trend, full position. 1-3% = moderate trend, standard position. Below 1% = weak trend, avoid or reduced size. This allocates more capital to stronger trends.
Calculate Triple EMA alignment for each sector index/ETF. Overweight sectors with strong bullish alignment. Underweight or avoid sectors with bearish alignment. Rotate as sector alignments change - leading sectors show alignment first.
Options: 1) Fast crosses below Medium (early exit), 2) Full alignment breaks (conservative), 3) Trail stop below Slow EMA (lets winners run). Best approach: Exit half on Fast/Medium cross, trail rest with Slow EMA.
EMAs inherently lag. Mitigate by: 1) Using pullback entries (better price), 2) Adding momentum indicators (MACD, RSI) for earlier signals, 3) Using TEMA for reduced lag, 4) Accepting lag as cost of trend confirmation.
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