The simplest high-quality trend continuation: in a confirmed uptrend, buy the first rejection off the 20-period EMA. Clean, mechanical, and works on every market with sufficient trend structure.
Indicators Used
EMA 20EMA 50
Rules
📈 Long Entry
- Confirm uptrend: EMA 20 above EMA 50, both sloping up
- Wait for pullback. Price retraces and touches (or slightly wicks below) EMA 20
- Pullback bar closes green above the EMA (rejection confirmation)
- Enter long on next candle open, OR on break of pullback bar's high
- Stop: below the low of the pullback bar (typically 0.5-1 ATR)
- Target: minimum 2× risk, ideally prior swing high
📉 Short Entry
- Downtrend: EMA 20 below EMA 50, both sloping down
- Price rallies into EMA 20 from below
- Pullback bar closes red below EMA, showing rejection
- Enter short on next candle, stop above pullback bar high
- Target: 2R minimum, prior swing low preferred
2:1
Min R:R
1 ATR
Avg Stop
💡 Pro Tip
The quality of this setup is entirely determined by the trend strength. In a weak or choppy trend, pullbacks to EMA 20 fail often. A strong trend shows clean separation between EMA 20 and EMA 50. When they're tangled, skip this setup entirely.