A challenge facing many new traders when developing their forex strategy is the ability to identify the overall trend for intra-day trading. Using the 200 EMA can help solve the problem. The 200 EMA is a very popular indicator and for that reason alone is worth noting due to the psychological effect on the market place price can have when hovering around forex ema 20 50 motor 200 EMA. To use this forex strategy, create charts on 3 time frames: the 4 hour, the 1 hour, the 15 minute.
Preferably tile the 3 windows containing your 3 charts into a vertical fashion so you can see the 3 time frames next to each other. It will squeeze up the information on the charts somewhat but for the purpose of this strategy that doesn’t matter. Now scroll through the various currency pairs you like to trade. If you prefer to trade only pairs with a smaller pip spread, they amount to about 9. What you are looking for is any currency pair that bucks the 200 EMA on the 15 minute chart. USD pair and note the position of price relative to the 200 EMA on the 3 time frames.
The overall trend is up, price has temporarily gone against the trend and is currently in a retracement. This is an easy exercise and it can be done once or twice a day, taking just a few minutes. Share your opinion, can help everyone to understand the forex strategy. Doubt the original poster will see this but this system covers several important concepts and distills them into a simple form. Good job and thank you for all of us who wouldn’t have come up with it on our own. Retail Forex traders have two things going for them that they can use to grow their trading accounts, both of which can be easily identified by using freely available price charts.
The second factor is picking good trade entry points within those trends. This article will show you how you can succeed at doing both and profit from trend trading. The 20 EMA is used by most institutions, banks, funds and big boys as part of their trading. Some use it with the cross of another MA or MAs as a system. 20 ema in some form or other in our trading.
The slope of the 20 ema and the cross of the 20 ema above the 50 ema tells you which direction you should be trading in. Think of the 20 ema as equilibrium, or the balance line which is the point at which buyers and sellers AGREE on price. Remember we are dealing with energy both of the market and its traders. Energy ALWAYS seeks balance through the path of least resistance. We know trading is a serious business and WE treat our trading as a SERIOUS BUSINESS. We understand we have, like any other profession, to put in the thousands of hours studying, learning and practicing our methods and techniques.
We understand there is NO SHORTCUT to becoming successful and profitable traders. We know who and what we have to control. This entry was posted in Forex Maximum Profits. Instead of 50EMA, you can also try other EMAs like 10, 20, 30 ema’s etc. The trading rules would still be the same. Wait for price to break the 50ema to the upside or downside.
The candlestick that breaks the 50ema either upwards or downwards is your entry candlestick. Place your buy stop order or sell stop order using this entry candlestick anywhere from 3-5 pips above the low or high of the entry candlestick. Your stop loss should be placed anywhere from 5-30 pips above the high or low of the entry candlestick. Sometimes you may get stopped out easily with this option.