Boost Your Trading Success with 200 EMA + RSI + Engulfing Candles

00:00 - Hello traders! Welcome back to the ComLucro 
Channel! Today, we’re excited to share   a powerful trend-following strategy that 
combines the 200-period EMA, RSI momentum,   and engulfing candles to create a structured, 
high-probability approach to trading. This   isn’t just about learning theory; we’ll guide you 
through a clear set of rules and demonstrate how   this strategy has been rigorously backtested and 
proven effective. It’s versatile, working across  
00:26 - nearly all markets and time frames, and most 
importantly, it delivers consistent results. At ComLucro, our mission is to provide you 
with the tools and knowledge to make smarter,   more strategic trading decisions. We’re not here 
to sell shortcuts or flashy promises. Instead,   we focus on practical, tested techniques 
that professional traders use to achieve   consistent success. We’ve condensed these insights  
00:49 - into actionable steps to save you time 
and help you trade more sustainably. If you’re ready to level up your trading 
skills, stay tuned. We’ll walk you through   every detail of this strategy and share key 
tips to maximize your results. Don’t forget   to check out our other videos and visit our 
website for even more in-depth resources. After this brief introduction, we’ll jump straight 
into the details. You won’t want to miss them!
01:11 - Hey traders! If you're looking to level up 
your trading game, give this video a thumbs up,   subscribe to the channel, and hit that 
notification bell so you never miss an update. Before we dive in, we highly recommend checking 
out our playlists on trading psychology and risk   management. These videos can significantly help 
you manage emotions, maintain discipline, and   develop effective risk management strategies—key 
elements for achieving profitability in trading.
01:38 - Please, listen and remember! No amount 
of study to find the perfect trading   strategy will benefit you if you lack 
emotional control during your trades.   If you cannot accept a losing trade and 
keep moving your stop loss, or worse,   trade without a stop loss, you are 
setting yourself up for failure. The efficiency of your strategy is directly tied 
to your risk management and emotional discipline.  
02:01 - Only when a trader understands and implements 
this can they start seeing consistent profits   and end their months in the green. Without these 
critical elements, even the best strategies will   crumble under poor execution and emotional 
decision-making. Now, let's get started!
First, it’s important to point out that 
many traders often make the mistake of  
02:24 - trying to catch the absolute bottom or top in 
a trend, hoping to perfectly time the reversal. While it sounds great to pinpoint the exact moment 
a trend reverses and ride the move to massive   profits, the reality is that finding that precise 
point is extremely unlikely most of the time. If you’ve watched our videos before, 
you know we’re all about probability   and success rates. We’re firm believers 
in trading with the chart, not against it.
02:49 - What we mean is, we only take trades 
when the chart shows a clear uptrend.   With that in mind, let’s dive into this strategy. So, let’s get right into it with rule 
number one—and arguably the most important   rule. We’ll only trade with the trend! At 
least, that's the case for this strategy. Now, you might be wondering, "How do I know if a 
chart is in an uptrend or a downtrend?" There are  
03:10 - several ways to identify market trends, ranging 
from price action analysis to advanced technical   indicators. However, one of the quickest and most 
widely used methods is through moving averages. To apply this, head over to TradingView, 
click on the indicators tab, and type in   EMA to add the exponential moving average to 
your chart. Once it’s added, open the settings   for the indicator and set the length to 200, 
creating a 200-period moving average. We  
03:35 - like to change the line to red for better 
visibility, but that’s entirely optional. For this strategy, the first and most critical 
rule is that we will only enter trades when   the chart is in an uptrend. Specifically, 
this means we will only take trades when   the price is above the 200-period EMA. If 
the price is below the 200-period line,   we simply don’t trade. Remember, trading with 
the trend is non-negotiable for this strategy.
03:58 - In this video, we’ll focus on how to trade 
long positions using this strategy. If you’re   looking to trade short, the concept is just as 
straightforward—simply apply the rules in reverse. Now that we’ve covered rule number 
one, let’s move on to the next rule   that must be met before entering a trade. Rule 
number two involves using the RSI indicator,   but with a unique twist. Here’s how to set it up:
04:19 - Go to the indicators tab and type in 
RSI Divergence—make sure to select   this specific one. Once it’s added, we’ll 
adjust the settings for better clarity. Open the settings, then uncheck the bottom three 
checkboxes to clean up the chart. Next, navigate   to the middle line tab, change the color to white, 
and make it a solid line for better visibility. While the traditional RSI is often used 
to determine if the market is overbought  
04:41 - or oversold, we’ll use it differently in this 
strategy—to measure momentum in the market. This brings us to rule number two: Only enter a 
trade if the RSI line is above the middle white   line. If all other conditions are met but the 
RSI is below the line, we don’t enter the trade. An added bonus of this customized RSI 
indicator is that it highlights divergences,   giving you an extra edge in 
spotting potential reversals.
05:04 - If you’re not familiar with divergences,   here’s a simple explanation without getting 
too technical: divergence happens when the   price moves in one direction while the 
indicator moves in the opposite direction. For example, if the chart is making higher 
highs, but the RSI is making lower highs,   that’s a divergence. The great thing about this 
customized RSI indicator is that it automatically  
05:25 - highlights when bullish divergence occurs, 
making it easy to spot potential reversal points. That said, a quick disclaimer: We’ve 
noticed that this RSI indicator can   occasionally miss divergences, 
so you might need to double-check   manually from time to time. Just 
keep that in mind as you use it. That said, it’s still a fantastic tool overall. 
While spotting bullish divergence isn’t a strict  
05:46 - rule for this strategy, it’s definitely a strong 
confirmation signal if you happen to see it. When all the other rules are in place, 
let’s move on to rule number three. If   you’ve watched our previous videos, 
you know we have a strong preference   for momentum candles. They’re a fantastic 
way to identify the start of a trend. The   specific momentum candle we’re focusing on 
is called an engulfing candle. Simply put,  
06:07 - an engulfing candle is one that 
completely engulfs the previous candle. A bullish engulfing candle opens at or below 
the previous candle’s close. The length of the   bullish candle’s body engulfs the previous red 
candle, and it closes above the previous candle’s   open. This pattern is a powerful signal 
for spotting the beginning of an uptrend. Rather than manually scanning for this 
candle and watching the chart all day,  
06:28 - we’ll let an indicator handle it for us. Go 
to the indicators tab and type in "Engulfing   Candle"—select this one right here. After 
adding it, you’ll notice a series of red   and green arrows on your chart. Since we’re 
focusing on long trades in this example,   you can disregard the red arrows. All the green 
arrows point out bullish engulfing candles. Finally, let’s move on to rule number 
three: We will only enter a trade if we  
06:50 - see a green arrow. Now, let’s break down 
what a successful trade setup looks like: First, confirm that the price is above the 
200-period line, indicating the chart is   in an uptrend. So far, so good.
Next, check that the RSI line is   above the 50 mark—and in this case, 
it is. Great, we’re still on track.  Seeing a bullish divergence is not a requirement, 
but if it’s there, it’s an extra confirmation—a  
07:14 - “plus one” that makes the trade even more bullish.
Finally, look for a green arrow, which indicates   a bullish engulfing candle. Important note: 
we will only enter the trade after the green   arrow candle closes. I repeat: do not enter until 
the candle with the green arrow has fully closed. Keep in mind, a candle might show a 
green arrow while it’s still forming,   but it can change before it closes, ultimately 
not qualifying as an engulfing candle. That’s  
07:39 - why we wait for the candle to 
close before taking any action.   Once the candle closes and there’s 
a green arrow, we enter the trade. For this strategy, we’ll set a stop loss at 
twice the length of the entry candle. Then,   we’ll set our take profit at a 2:1 ratio relative 
to the stop loss. It’s that straightforward. And just like that, the price hits our target! 
If you’re someone who tends to get anxious,  
07:60 - exits trades too early, or second-guesses 
your decisions, here’s a valuable tip:   set your take profit, set your stop 
loss, step away from the screen,   and let the strategy do its job. Trust 
the process and let it work for you. This approach helps you avoid emotional trading, 
like selling too early or, even worse, getting   greedy and moving your take profit. It instills 
discipline and keeps you focused on the strategy.
08:23 - It’s also important to understand that you 
won’t be trading every day with this strategy.   Since we’re only trading with the trend, the 
chart won’t always be in a trending phase.   There will be days when the market simply 
doesn’t meet the criteria for a trade. And that’s okay. The key is recognizing that this 
is part of the process. You’ll only trade when   the market aligns with your strategy, ensuring 
you’re working with the market—not against it.
08:45 - Let’s do one more example to tie it all 
together. First, we check if the price   is above the 200-period line. That’s our first 
confirmation, and in this case, it checks out.   Next, we look at the RSI to make sure it’s above 
the 50 line, and it is—so we’re good there too. Now, we also spot a bullish divergence on the 
RSI. While this isn’t a requirement, it’s a great   bonus and increases the chances of this being a 
winning trade. So far, everything’s looking solid.
09:09 - Then, we notice a candle 
with a green arrow under it,   which means it’s a bullish engulfing 
candle. The key here is to wait for that   candle to close before doing anything. 
Once it closes, we enter the trade. From here, it’s straightforward: We set our stop loss to two times 
the length of the engulfing candle. 
09:26 - We set our take profit to 
a 2:1 profit-to-risk ratio.  And now, we simply wait. The price eventually 
moves up, hits our take profit target, and we exit   the trade successfully. Easy to follow, right? 
That’s the power of a well-structured strategy! Now, to wrap things up, let’s go over a 
quick summary of the strategy we presented: First, identify the trend using the 
200-period EMA. For long trades,  
09:50 - the price must be above the EMA, 
indicating an uptrend. For short trades,   the price must be below the 
EMA, signaling a downtrend. Next, check the RSI momentum. For longs, the 
RSI line must be above the midline. For shorts,   it must be below the midline. This ensures 
you’re trading with momentum in your favor. Then, look for a confirmation candle. For longs, 
find a bullish engulfing candle. For shorts,  
10:15 - spot a bearish engulfing candle. This provides 
the final green light for entering the trade. Finally, apply proper risk management. 
Set your stop loss and take profit   using a 2:1 risk-to-reward ratio, 
and let the strategy play out. Stick to these steps consistently for 
high-probability setups in any market. In conclusion, this strategy highlights how 
clear, disciplined rules can drive consistent  
10:38 - trading results. By combining the 200-period EMA, 
RSI for momentum, and engulfing candle patterns,   you have a trend-following approach that 
works across markets and time frames. Patience and discipline are key. This strategy 
keeps you focused on high-probability setups,   trading only when the market aligns with your 
rules. Trust the process, refine your execution,   and let the strategy work 
without emotional interference.
11:03 - If you found this helpful, check out our other 
videos and visit our website for more insights.   Thanks for watching, and see you in the next video 
here at ComLucro! Best of luck in your trades!!! I hope you enjoyed today's video. If you found 
the content useful or fun, please give it a like,   as this helps the video reach more traders like 
you. Remember to subscribe to the channel and   activate notifications to stay updated with the 
latest financial market information and trading  
11:30 - tips. Sharing this video with your 
friends or on your social networks   can make a big difference and helps 
our community become stronger. Your   support allows us to continue 
bringing high-quality content,   helping you make more informed decisions in the 
markets. Thank you for watching and good trading!