Forex Family EMA Chronicles: EMA Magnets!

What are Magnets?
The term ‘Magnets’ originated based on what I saw. When price moves away from the EMA. It ALWAYS comes back to the EMA hence the term magnet that price is always attracted back to the EMA.

What is the objective?
The objective is to get quick short scalps (you can do higher timeframe also) but I just prefer using the lower timeframe as its quick in and out trades.

Why does this happen?
Price generally follows EMAs and uses the 14 EMA almost like a cushion. It’s almost like a price baseline which guides/follows with the price. Hence when price moves away we know it will come back.

Why the 14 EMA?
If you read the previous documents I have made you will know that price loves to move with the 14 EMA. I have looked at EMA’s lower than this but this suits my needs. Also keeps things universal. No matter what I do swing/scalp, trend, count trend I’m using the same set up.

What if it breaks the 14 EMA?
This I find happens quite often on the lower timeframes like 5m and will probably go to the 50 EMA. I use the 14 as my first TP because I know it’s the most likely target so I don’t over anticipate. Anything more is a bonus.

Huge push which was due to news in this case.
See how it’s exhausting? The candles are creating bottom wicks and failing to break down

So the first bull candle close indicates exhaustion to me because of how big of a push it was
I don’t enter till the next candle because I want the best entry I wait for a little pullback and then enter.

This way my SL and risk is super rewarding. My SL would be just below the wick so figure out how nice of a risk to reward I am playing with.

See how every candle is closing bullish and makes its way back to the 14 EMA? This is my first TP and I would close most of my entries at this point. I’d leave one with SL in profits if it does higher.

Entry Criteria

The main thing to look for when entering is EXHAUSTION
How do we see exhaustion?
Many ways....

Near support/resistance areas
When you see the candles are failing to break up/down. Leaving a wick or two which shows exhaustion because if it can’t push up then it’s going to go where?
After a huge spike commonly seen with news. We see price retrace for liquidity for example

So we wait for exhaustion 2-4 candles is general enough to figure out exhaustion.
If price is failing to push up and creating top wicks then where are we going to go logically? Down right..
Ride it back to the EMA.
Your stop loss would be just above the wicks and TP at the EMA
When done correctly your SL will be super tight enabling you to have a great risk to reward ratio.
The Best Magnets are seen on 15m+
For serious scalpers you can do this on 1m-5m too
That’s simply all it consists off....so to reiterate

Price moves away from EMA
Wait for exhaustion
If its near a s/r zone that’s the ideal entry location
Wait 2-4 candles for confirmation
Ride back to the EMA

For super aggressive entries near solid s/r zones I personally sometimes just wait for one candle or enter without confirm based on intuition but I have super tight SL of sometimes even less than 5 pips so my risk is contained.
Remember to be patient and DO NOT RUSH.
MAGNETS ARE MOSTLY COUNTER-TREND SO ACT WITH CAUTION!
As easy as magnets can be or I’ve made it sound it’s near like trying to catch a falling knife so be wary.
Take your time
And execute with precision.
I myself occasionally still make mistakes and they are 99% of time due to patience so please practice
lots and don’t attempt to be a hero

With the 200 EMA

As you know I’m a big fan of the 200 EMA
So let’s run through a few examples with the 200 EMA in conjunction
The 200 EMA acts as very nice support/resistance line. So if price is away from the 14 and the 200 is in close proximity. Price most likely will go towards the 200 EMA and exhaust before a move back to the 14 EMA.
That in my opinion would be a better entry.
Now let’s see a visual explanation of this happening.

See how price was trending with the cross
See how it pushes to the 200 EMA but doesn’t break?
Touches and pulls back to the 14 EMA

Very important! Notice the consolidation and what would appear to be exhaustion prior to the move to the 200 EMA?
See how it was a bad idea to enter at that point. Best moves are always caught by zones (200 EMA highlights a zone area)
More examples will be added towards the end of this document...

As a general rule of thumb for higher timeframe 200 EMA:

When 4hr 200 EMA is respected it will go back to the 1hr 14 EMA
When the 1hr 200 EMA is respected price will go back to the 15m 14 EMA

What timeframe is the best?

The decade timeframe......
Joke I would really look into what suits your personal preference but this method of trading is applicable to all timeframes just bare in mind.....
The lower timeframe is harder as its very fast moving so you need to be super sharp.
Personally I’d say 5-15m are good to start off with.
Higher timeframes are great for a bigger pip yield
What is the ideal session/time to trade these?

This is a very open question as it can be anytime.
Any sort of spike even a small one on the 1m timeframe can get you a 5 pip magnet.
The BEST times however are after news releases when we get huge volume pushes and nice retracements when price needs to settle.
Also the end of London close is very nice which will be explained later.... :)

The push
Exhaustion
Retrace back to the 14 EMA

Session Close EMA Magnets

EMA Magnets
In a nutshell the magnet trades are counter trend trading for a gain of anywhere between 8-20 pips against the direction of overall momentum. The counter trend move is what we refer to as a pullback in price. As we know we have to have pullbacks for liquidity purposes for the market to move in the waves that we know of. Lows and Highs. This can be executed on multiple time frames but in my personal opinion I find 5 minute and 15 minute the most effective.

Timing of Magnets
Session timing is extremely important. Each day we have a cheat code of when to expect volume of orders and therefore the bigger price fluctuations in the markets. This is known as session times. All times below are based on UK (GMT) time zone as it is based on my own trading.

Taking these timings into account we know price will always move solidly when the session time is prime. This also includes the overlap of sessions (multiple sessions open at the same time = London & New York are both active from 1pm-4pm).

If there is a lot of volume and order flow then chances are price is going to trend nicely all being well minus consolidation periods. The timing of the session is fundamental to trading counter trend as the chances are if we are trending harshly we will be breaking support/resistance points on multiple time frames until we reach key levels. So the last thing you want to do is try and trade counter trend when the chances of a break of the support or resistance is actually more likely than a price retracement due to the timing of the session and orders will just continue to make price push.

Magnets rule of thumb
As a rule of thumb when price reaches support or resistance we often pullback for liquidity to potentially move through that level. Price will often come back and respect or retest the EMA. It is key to plot your support and resistance on 1 or 4 hour time frame to have more success in judging where price will likely stall for the pullback to begin.

Ideal Magnet Example
Here we have below the ideal example. It matches as discussed above the session timing. As when we come to 4pm in the afternoon and London has closed and New York has had the pushes for volume the chance of us breaking support would not be very high as we do not have enough volume to do so. As you can see in the image below the perfect example. Labelled in depth of each stage mentioned in the document.

We have have momentum, we find support, we have a small stop loss for a medium take profit 1:2/3 risk because it has to be WORTHWHILE trading against the trend. All that jazz about trend being your friend is true. The time of the trade was just after 4pm so when London had close so are we going to be breaking support without order volume? Hell no!

Hopefully this document has given you an insight into how I successfully trade using EMA magnets based on session timing. If you think logically trading can be simple.

Key tips to remember for trading Magnets

Wait for price exhaustion (wicks and taps)
Let price stall
Enter on the first bullish candle
Ask yourself, does it make sense for a pullback?
Check the time of the session and candles. Are we coming to close of a trading session? Are we coming to a close of a major candle such as 4 hour?
Use a tight stop loss as it is counter trend and if you get stopped out, it is for the best.

Further example