15 EMA Fake Breakdown Strategy Scanner
15 EMA Fake Breakdown Strategy Scanner
15 EMA Fake Breakdown Strategy is designed to identify short-lived moves below the 15 EMA that fail to continue and are followed by a recovery toward or above the moving average. Because the 15 EMA responds relatively quickly to recent price movements, it can be used as a short-term dynamic trend reference. A temporary move below the EMA followed by a quick recovery may indicate that selling pressure is weakening and the breakdown is losing strength.
This screener is designed specifically for bullish fake-breakdown setups, so the conditions below focus on potential buy opportunities.
Important: The screener identifies a potential setup. A trade should be considered only after price confirmation and appropriate risk management.
Scanner Conditions
- Lookback Period: 10 periods
The scanner examines the most recent 10 candles for a temporary move below the 15 EMA. This keeps the setup focused on recent price behaviour rather than an older breakdown. - Maximum Breach: 1%
The close-side breakdown is restricted to a maximum 1% breach of the 15 EMA. A shallow breach is preferred because the setup is looking for rejection rather than a sustained bearish move. - Maximum Fake Breaks: 1
Only one qualifying fake breakdown is allowed during the lookback period. This reduces repeated oscillations around the 15 EMA. - Maximum Duration: 1 period
The breakdown should be very short-lived. A one-period limit makes the scanner more selective for quick rejection and recovery. - Breach Recency: Within the last 2 periods
The breakdown must be recent, so the stock is still close to the event that triggered the setup. - Close Recency: Within 1% of the 15 EMA
The current price must remain close to the 15 EMA. This prevents the scanner from returning stocks that have already moved too far away from the original setup. - Price Strength: Above 50 EMA
Closing price is above the 50-period EMA, indicating that the stock is trading on the stronger side of its medium-term moving-average level.
Importance of 15 EMA
This screener can be used for swing trading to identify quick failed breakdowns and short-term recovery opportunities.
15 EMA is useful as a short-term dynamic support and resistance reference because it reacts relatively quickly to recent price movements.
In a fake breakdown setup, the 15 EMA helps identify whether selling pressure below the moving average is being sustained or rejected. A quick move below the EMA followed by recovery can indicate that the breakdown has failed.
- Short-Term Trend: It provides a reference for the current short-term price direction.
- Dynamic Level: EMA can act as a moving support or resistance area instead of a fixed price level.
- Fake Breakdown Detection: A quick rejection below the 15 EMA can highlight a potential failed bearish move.
Entry
Entry should be considered only after the fake breakdown shows signs of failure. The scanner identifies the setup, while price confirmation can be used to trigger the trade.
- Long Entry: Consider a long entry when price recovers from below the 15 EMA and shows a bullish confirmation.
- EMA Reclaim: A close back above the 15 EMA can be used as confirmation that the breakdown is losing strength.
- Confirmation Candle: Traders may consider entry above the high of the bullish confirmation candle.
- Volume Confirmation: Higher volume during the recovery can provide additional confirmation to the setup.
Stop Loss
The stop loss can be placed below the low created during the fake breakdown. This level represents the area where the failed-breakdown setup would be considered invalid.
- Initial Stop Loss: Below the low of the fake-breakdown candle.
- Risk Control: The stop loss should be decided before entering the trade so that the position size can be adjusted according to the acceptable risk.
- Trailing Stop: If price moves in the expected direction, the stop can be trailed below the 15 EMA or recent swing lows.
Target
Target levels can be identified using nearby resistance, previous swing highs and the risk-reward ratio of the trade.
- The nearest resistance or previous short-term swing high can be considered as the first target.
- Risk-Reward: Traders can consider setups offering a favourable risk-reward ratio, such as 1:2 or better, depending on the chart structure.
Why Use a 15 EMA?
EMA gives greater weight to recent prices and therefore reacts faster than an equivalent SMA. That makes shorter EMAs useful when the objective is to detect changes in price behaviour quickly.
TSR Custom Screener
TSR Custom Screener can be used to scan stocks matching these conditions without manually checking every chart.
Important Note
A fake breakdown is a screening condition, not a guaranteed buy signal. Consider trend direction, volume, support/resistance and price confirmation before taking a trade.
Fine Tune : You can customise these screeners by clicking on 'Fine Tune Filter' Option
Caution : All these screeners are crafted based on some historical scenarios which may / may notbe applicable here. We recommend to fine tune them according to current market conditions or seek expert advise before taking any decision.