Simple Profitable Forex Exponential Moving Average (EMA) Trading Strategy

Forex Exponential Moving Average is a strategy for trading with the trend. This forex system is an intraday strategy based on trend momentum indicators.


DEFINITION of ‘Exponential Moving Average – EMA’ – A type of moving average that is similar to a simple moving average, except that more weight is given to the latest data. The exponential moving average is also known as “exponentially weighted moving average”.

BREAKING DOWN ‘Exponential Moving Average – EMA’ – This type of moving average reacts faster to recent price changes than a simple moving average. The 12- and 26-day EMAs are the most popular short-term averages, and they are used to create indicators like the moving average convergence divergence (MACD) and the percentage price oscillator (PPO). In general, the 50- and 200-day EMAs are used as signals of long-term trends.

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Simple EMA Trading Strategy

 

Time Frame: 30 min.
Currency pairs: Majors.


 

Tools Indicators:
  1. Exponential Moving average 20 period close (measures the short trend-momentum ).
  2. Exponential Moving average 50 period close ( identifies the intermediate trend ).
  3. Exponential Moving average 60 period close ( identifies the intermediate trend ).
  4. Exponential Moving average 200 period close ( identifies the long-term direction).
  5. Filter (setting 240 min)
  6. Awesome oscillator.
  7. Info (main informations on the price movement).
  8. Sipper Indicator
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EMA Forex Trading Rules

 

Trade only in the direction of the trend.

 

Buy Rules
  • 12 EMA >50EMA>60EMA>200EMA
  • Trend Filter green bar.
  • Avesome green bar.
  • Sipper green bar.

 

Sell Rules
  • 12 EMA <50EMA<60EMA<200EMA
  • Trend Filter red bar.
  • Avesome red bar.
  • Sipper red bar.

 

Info indicator: optional.

Re-emtry when the price come back on the 40 EMA with the same conditions.

 

Exit Position
  • Profit Target ratio 1:1, 1:2 stop loss.
  • Initial stop loss 8 pips above/below 200 ema.

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