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PAY ATTENTION TO TREND
Buy and Sell Signals should generally be traded in the direction of the trend, and at trend reversals.

The EMA Trend Indicator
The most consistent path to profits is to trade in the direction of trend… and anticipate trend reversals. The EMA Trend Indicator is an excellent tool for determination of the trading trend.

• The trading trend is down when the blue EMA line is moving down and the red EMA line is below it and moving down.
• The trading trend is up when the blue EMA line is moving up, and the red EMA line is above it and moving up.

This combination of the red and blue EMA Trend Indicator lines will have you trading in the right direction for much of a trending move; however, it tends to miss the beginning of new trending moves that often follow trend reversals. Fortunately, these moves can be picked up by the %Diff Indicator, which is the %Difference between the two EMA Trend Indicator lines, and is plotted on the chart as a dashed red line.
Trend direction can best be seen in a combination of the EMA Trend Indicator lines and the %Diff lines. The red EMA Trend Indicator line and the dashed red EMA %Diff line show trend direction when both are moving in the same direction. Use the combination of the direction of the red EMA %Diff and red EMA line as a filter to trade in the direction of trend. When these two lines are moving up, trade the Buy Signals; when these two lines are moving down, trade the Sell Signals.

• The trading trend is up when the red EMA line is moving up and the dashed red EMA%Diff line is also moving up.
• The trading trend is down when the red EMA line is moving down and the dashed red EMA%Diff line is also moving down.

The interaction of prices with the red and blue EMA lines can also be very helpful to determine trade direction.

• When the red EMA line is above the blue and prices drop down to the blue line, finding support as the oscillator is at an oversold low, a trading cycle is frequently making a bottom and Buy Signals can be taken.
• When the red EMA is below the blue and prices move up, meeting resistance at the blue EMA line as the oscillators are overbought a trading cycle top is frequently topping, and Sell Signals can be taken.

Also, by watching the direction of trend relative to the %Diff and the EMA lines, you can trade oscillator patterns based on the interaction of the purple DBS5 and the blue DBS10.