1. It is important that one is able to find a system which helps one to make money and if the system makes money than do not tinker with it as certain people will say that we will try to improve the system or so forth. One such simple system to following the e5 days exponential moving average which can be further sub divided into its high and low and in the course of discussion same will be referred as 5 EMA(High) and 5 EMA(Low).

2. The rules for making money with this system is as enumerated below:
(a) Have a look at the data and see if the stock or the indices is trading above 5 days exponential movg average high price {5EMA(High)} and if the same is so than the trend is up with support at 5 EMA(High)and one can even mark the next level of support which comes near 5 EMA(low).

3. Now comes the situation when the stock or indices is trading in between 5 EMA(low) and 5 EMA(High) and in that scenario the expected trend is likely to be rangebound between 5 EMA (high) and 5 EMA (low) with resistance at 5EMA(high) and suppport at 5 EMA (low).

4. Last scenario exists where stock or indices is trading below 5 EMA(low) and in this scenario one will see price to trend lower with resistance at 5 EMA low and next level of Resistance comes near 5 EMA(High).

5. In order to have a perfect trading set up one will be better of catching a stock or indices at 5 EMA low - EOD with stop loss below 5 EMA-High.

6. In order to avoid going grossly wrong one should also use the weekly and daily charts to know the exact trend. Also have a look at 3 month Indices chart with 5 EMA(High - Low) Indicator and it will help one to get the accurate EOD Supports and Resistance.

Click Here to Get Free Nifty Trading Tools Tip in Email