Today we are going to be talking about how to find and confirm your entry points and exit points in natural gas. ETFs My goal is that by the end of this video, you'll have a solid understanding of how to make more consistent trades with natural gas ETFs you gas and Diyas as well as a full working knowledge of how to use the exponential moving average to confirm your entry points. Anyways, all that I ask for in return is that you hit that like button. Also, if you see value in this video, don't forget to subscribe for more short sweet and simplified videos on how to trade the stock market.

So I'd say the most common question that we get on our zip trader circle Facebook group is how to find the ideal entry and exit point. Now it's easy to say looking at previous price action that the ideal entry point would have been right at the bottom, but there's no way that you could have possibly known that at the time because the price could have just as well kept going down. So instead of trying to get in right at the bottom, what you could focus on instead is waiting until we see a pattern confirmation on the EMA line. Now what this means is that instead of getting in here when the price is struggling to move off of support, you get in when the price breaks over the purple EMA line.

Now the EMA line is the exponential moving average and I'm going to discuss a little bit more about how to set that up too, specifically for this purpose because you can't just use the default settings, but we're gonna cover that a little bit later now, as you can see virtually every single time, if you had listened to the role of buying when the price action crossed the purple EMA line, you would have made at least a bit of profit. Now, as a cautious investor, you know that I'm not going to take a position every single time this indicator tells me to. So just because it worked every time doesn't mean that I would have necessarily taken those positions. Instead, I'm going to buy in when the RSI is indicating the stock is at or below fair value as well as seeing that crossing over the EMA.

This way, it ensures me that I'm not overpaying for a stock because if I am, that means it's less likely I'm going to see that extended upward potential. But it really comes down to your trading style. A lot of people will just like to scale profits and that in that case, maybe it is a good strategy to buy and when the indicator indicates that upward momentum. But but the second half of the equation is knowing were to get out.

Now that we've established that we need to get in when the price was indicating it was below fair value, we now consider our goal to sell out when the price is overbought. Now, the reason this is an important exit point is because when the share price is overbought, it has a comparatively high probability of adjusting downwards and keeping this in mind over the long term. That means that we should sell out at this level in order to be profitable, not just in a short term, but in the long term as well. If you think about it when you hold past the overbought line, say it continues to pass this overbought line two out of ten times.

That sucks for the two times, or it continued to gap up because then you would have lost that extra profit. But the other eight times where it wasn't going to go up, you'll be able to protect your profits. Going back to my EMA strategy: if you blow up the chart, you can see that every single time the stock price originally crossed the EMA line, especially after an extended period of being below it, it would have been a good buy. Now, towards the end of the day, there were a few times when we saw this sort of crossing back and forth a CEM a line.

Technically my strategy still worked at that point, but that would have been only for scalping extremely small, like $0.10 profits. And that's why you should place an emphasis on price action that is trading below the EMA line for at least a little more extended period of time. Be longer and farther the price action held below the EMA line, the more likely you're going to have a bigger breakout above it. Okay, but in order for the EMA line to provide this pattern conformation, you must have it set up properly.

I have it set to 15 because if you look back at the general downtrend in you gas which has been happening since it was at Sixty Seven Seven, which was approximately fifteen days ago. So you should say you EMA line to the time period where you have seen me sell off for down trending stocks and gapping up for up trending stocks. Now this doesn't mean sell off in terms of that intraday, because today was an update, right? It means the overall selling off or gapping up of a stock. By the way, you can do this by going to studies and then the Edit function.

I'm not going to cover that in detail because I have a video on how to use thinkorswim and setup the studies and everything Well, I'll put a link to that in the description. Okay, so by this point you should understand how the EMA line comes into play when confirming entry and exit points. but you should only use the EMA to confirm entry points on the ETF that is trending upwards for that set day. So if you gas is trending upwards, you use the EMA to confirm entry points.

and if it's trending downwards, you use D gas. So to explain this a bit more if we pull up DG As we could see that although the stock price gapped up after crossing me he am a line each time, the RSI was rendered mostly useless due to the fact that the stock price had been consistently losing strength throughout that day. Thus, it would have been extremely difficult to find an exit point. and if you have, if you had held on too long, you'll be slowly wiped out because of the downtrend.

And then you can compare this to the next day when we saw the break above the Ma line and the Etf trend up for that day. anyways. I Hope this video was useful for you. If you have any questions, hit that comment section below.

We also have our Zip Trader Circle Facebook group for more in-depth questions and it's really a great opportunity to be a part of our community and I also answer most of the questions myself. Just make sure to tag me in it because it's hard for me to figure out. You know who's specifically referring to me because of the fact that you know we get a lot of responses and whatnot. Um, anyways, have a great day folks and I'll see you in the next video.