EMA Chronicles:

EMA Magnets!

By EMAs Don’t Work 1/4/18 Forex Family ©

 - INTRODUCTION -

The purpose of this document is to further advance your knowledge on EMA’s (Exponential Moving
Averages) – If you didn’t know the definition of this. You are not ready for this.

This time in the series. We will go over the phenomena known as EMA magnets!

Shout out to Alex Hill (@alexhillfx) also known as the super spice girl fan
as posh spice who has kindly provided content to go over EMA magnets
at London close. His part is towards the later part of this document. I will
also add some perfect examples at the end for visual references

So this really is the holy grail of magnets

First part is the methodology..

Second part is implementation….

Third part is all on you to practice and perfect the skill.

It doesn’t get any easier than this. All on a silver platter (I’m selling this quite well aren’t I?)

As you can see there is a fair bit to cover.

So without further a due let’s get started…

DISCLAIMER:
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all
investors. Before deciding to trade foreign exchange, you should carefully consider your
investment objectives, level of experience, and risk appetite The possibility exists that you could
sustain a loss of some or all of your investment and therefore you should not invest money that
you cannot afford to lose. You should be aware of all the risks associated with foreign exchange
trading, and seek advice from an independent financial advisor if you have any doubts.

To anyone who decides to be selfish and profit from selling this document. Please have
some moral decency and respect for other people’s effort. I still know some of you are heartless
and the greed will carry this on, so as a humble request any funds you do get from
unauthorised distribution please donate some to a respected charity.

#TheForexFamily
 - WHAT ARE 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.
 - THE VISUAL EXPLANATION -

1
3
2

1. Huge push which was due to news in this case.

2. See how it’s exhausting? The candles are creating bottom wicks and failing to break down
a. So the first bull candle close indicates exhaustion to me because of how big of a push it
was
b. I don’t enter till the next candle because I want the best entry I wait for a little pullback
and then enter.
i. 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.
3. 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.
14 EMA is BLUE – 50 EMA is Green – 200 EMA is RED
 - ENTRY CRITERIA -

The main thing to look for when entering is EXHAUSTION

How do we see exhaustion?

Many ways….

1. Near support/resistance areas

2. 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?
3. 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.

REMEMBER:

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

Expecting more???

That’s simply all it consists off….so to reiterate

1. Price moves away from EMA

2. Wait for exhaustion
3. If its near a s/r zone that’s the ideal entry location
4. Wait 2-4 candles for confirmation
5. 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 

1. See how price was trending with the cross

2. See how it pushes to the 200 EMA but doesn’t break?
3. 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 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…. :)
 - QUIZ -

What is of a magnet?

What are the extra benefits of the 200 EMA?

How do we know if a magnet will take place or not?

How does it tie in with the original 14/50 EMA strategy?

What is the entry criteria?

What is the key part of it all?

ANSWERS:
1. When price pulls back to the EMA

2. Outlines a nice zone so a nice reversal area if price is away from the 14 EMA

3. We wait for exhaustion near a zone and wait for candle confirmations.

4. It doesn’t!

5. Exhaustion > Patience > Confirms > Trade back to the EMA

6. PATIENCE!

If you got all these answers correct then bravo you are one step closer to becoming EMA Magnet
Specialists which I’m going to name ‘The Magnetizers’ LOL
 - VISUAL REFERENCES -

3
1
3

1 2
1. The push
2. Exhaustion
3. Retrace back to the 14 EMA

Make sense?

Wait for candle close…Wait for exhaustion.

Tight SL

EMA TP

Simple right?

Remember to wait for EXHAUSTION!

Look left always and make sure it’s near a support/resistance zone

Now we have posh spice’s input. Some things are repeated with posh’s own touch.
Notice we do the same thing but have added our own touches to personalise it for us individually.

So when it comes to implementing please find what suits you.

Not every condom fits every dick!

 Session Close EMA Magnets
Howdy partners, here is another PDF about magnets. As it is the holiday
season it allows me time to reflect on 2017 and success and failures.

A success in my eyes this year was the consistency in my counter trend trading of what we like to call
“EMA Magnets”.

Before you read any further I use 14, 50 and 200 Exponential Moving Average (EMA) set to
close.

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.

8am London Open

1pm New York Open
2:30pm New York Stock Exchange Open
1am Asian Open

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.

Thanks for reading and have a lovely day.

Yours pippingly,
Posh Spice
AH FX
 - FURTHER EXAMPLES -
DISCLAIMER: THE TIMEFRAMES USED ARE JUST WHAT I PREFER

PLEASETEST WHAT WORKS FOR YOU!!!

In this one notice when you look let there is a minor zone. Not clear but visible enough

Price came to that zone and reversed. Back to the EMA

Patience Patience....Get those sniper entries