5 EMA Strategy

Strategy Suitable for

• Intraday Scalping; Reversal Strategy

• Best Works in Bank Nifty
• Works in high-volatile Stocks
• Avoid ITC, NTPC, Government Stocks- Frequent SL Hit.
• Min account balance for 1 lot Option buy 50,000/- as
drawdown very fast.
Basic Framework
• Candle must not touch 5 EMA – Alert Candle
• Use 5 minute candle for Sell. 15 minute candle for Buy.
• Find buy opportunity if candle close below 5 EMA, Candle low SL
• Find sell opportunity if candle close above 5 EMA, Candle high SL
• Maximum 3 Stop-Loss a day & Close system.

Sell Trade Setup

Buy Trade Setup
Drawbacks
• Generates multiple trade signals in a day. Many false signals.
• Only for Intraday, not positional trading
• Have to monitor screen most of the time.
• Success rate 20-60% (Depends on the week)
• Can get big targets, but up to 40-70% Capital Drawdown occurs. Can’t
trade same quantity after major drawdown.
• Varying Stoploss from 70 points upto 300 points in Bank nifty
• Option Premium Decays if no momentum
 Modifications Of 5 EMA Strategy
• Only Take Selling Trades
Increase accuracy to 70-80%
• Open screen only after 9:30 Very few false signals

• After 1:1.5 Risk-reward, book 50%

• Only after 1:2 shift SL to Cost. Main objective- protect capital
• After every 1:1 trail SL. Can get up-to 1:10
• Initiate trade only if these types of candle forms above 5 EMA-

Different Doji candle

 Shooting Star Candle (Must Be in Red color. Green not allowed)

Ignore Trade If This Kind of Red Candle Forms above 5 EMA-

They all have a lower wick.

Generates false signals. Low = Close
for better accuracy
• Look for 500,1000 Levels in Banknifty. Previous day High, Low, Close
are crutial level. Can exit some quantity there. Comes with
experience. Beginners follow Risk:Reward ratio