The EMA Cloud can be used to help confirm Buy, Sell, or Firm Signals.
How to trade with it:
- When a candle closes above the cloud it is considered bullish and the cloud turns green.
- If the candles stay above the green cloud it is considered bullish.
- When a candle closes below the cloud it is considered bearish and the cloud turns red.
- If the candles stay below the cloud it is considered bearish.
- If a candle closes within the cloud, the direction is undecided and could move either way.
Some things to keep in mind:
- If the cloud is starting to become thin, it means either the recent trend is potentially coming to an end or the market is moving sideways.
- If the cloud is starting to grow in width, it means the trend is becoming stronger (bullish or bearish).
Combining Volatility Cloud with EMA Cloud:
- Easily one of the most helpful tools to use while trading is the combination of the Volatility Cloud & EMA Cloud together. To learn more about Volatility Cloud & how to read it click here.