How to Trade the 13 EMA Shorting Strategy

Robert Millar • 19th June 2018

In our last blog HERE, we discussed using the 13 EMA with our bounce strategy. That was one of the several strategies we consult the 13 EMA with on the long side. Today, we’re using the 13 EMA with $GEVO that provided decent gains for us on the short-side.

Here’s $GEVO the news that I don’t care about: Gevo Inc. soared more than 300% at its peak Monday, after an Environmental Protection Agency decision that increased the volume of a biofuel that the company makes that can be blended with gasoline for on-road use in cars. 

All I care about is that $GEVO went from $3.50 to almost $19 in two days! No matter what account size you have, this is one of those rare plays that can be a game changer. Are you ready to catch a play like $GEVO? If not you need to be! 

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What is the 13 EMA?

The 13 (exponential moving average) EMA is a key component to the Fous4Trading Strategy. A moving average can be calculated in different ways. A thirteen-day simple moving average (SMA) adds up the thirteen most recent daily closing prices and divides it by thirteen to create a new average each day. Each average is connected to the next, creating the singular flowing line. It can be used with any time frame in this manner. The difference with an EMA over a SMA is that more weight is given to the latest data which is preferred in momentum trading styles like the Fous4Trading strategy. 

Why is it Important? 

A moving average helps cut down the amount of “noise” on a stock chart and be helpful in making good trading decisions, both long and short. Many ask “why use the 13 EMA over the 9 or 20 Day EMA?” The answer is simple, preference. I feel the 9 Day EMA is too short and the 20 Day EMA is too long and commonly used.  Since the EMAs are always moving up or down depending on the price action, these levels act as dynamic pivot zones that you can use to place long or short orders. 

How the 13 EMA will improve your trading?

It’s recommend that you use price action triggers to place the order instead of blindly placing limit buy or sell orders around EMAs. EMA’s are more of an important guide or one of the many tools used to make decisions in trading. 

One must understand a complete strategy and how the 13 EMA or any other indicators/tools fit into that strategy. There’s NO tricks or tips that will make you money in the stock market.

That is why we teach and mentor students from the ground up within our 90-Day Fous4 Pro Mentoring Program. We start from square-one and build new traders up to professional-level understand of trading the stock market. We do this with a combination of on-demanding trading courses, 3x weekly mentoring classes, simulator software, and live trading together daily. 

Interested in learning or have any questions? Email me directly at 🙂 

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