EMA Trend Indicator Simple Forex Day Trading Strategy
The EMA Trend Indicator Simple Day Trading Strategy is a forex trading strategy that is deployed for day trading.
The custom indicator is designed after the Exponential Moving Averages using a cluster of four moving averages, where two of the lines represent the “Fast MA Period;” while the other two lines represents “Slow MA Period.”
MetaTrader4 Indicators: Free Scalping System (default setting), EMA_Trend_Indicator (default setting), Williams’ Percentage Range (14)
Preferred Time Frame(s): 5 Minute, 15 Minute, 30 Minute, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Recommended Trading Sessions: Any
Currency Pairs: Majors & Minors (EUR/GBP, EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CAD, NZD/USD)
Buy Example (click the image for full size):
Long Entry Rules:
Initiate a buy entry when the conditions listed below are met:
- When the first bullish candle opens and closes above the top most EMA_Trend_Indicator line, then it is an indication of an eminent bulls market.
- The Free Scalping System custom indicator changes from red to lime, indicating a buy signal.
- The Williams’ Percentage Range (14) indicator would be used to confirm reversal and as such we have added it to confirm such behaviors in price.
Stop Loss For Long Entry: engage your personal money management strategy, while placing stop loss below the bottom EMA_Trend_Indicator i.e. the bottom purple line.
Exit Strategy/Take Profit For Long Entry:
Exit your position(s) upon sighting the following indicator patterns:
- The Williams’ Percentage Range (14) on our chart is used to detect reversal in price behavior, thereby giving clue to when to prepare an exit. Above the -20 mark is a region that is said to be overbought, while this is true a reversal is said to be in place when the indicator’s signal line (blue line) dips downward past the -20 level.
- The Free Scalping System indicator changes color from lime to red, signaling a trend reversal.
- When a bearish candle closes below the bottom purple colored EMA_Trend_Indicator line.
These criteria listed above for exiting positions might occur simultaneously, but the trader has the final discretion of taking profits upon seeing any of the above conditions setup on his chart.
Sell Entry Rules:
Place a short order when the following conditions are in place:
- When the first bearish candle opens and closes below the bottom EMA_Trend_Indicator line i.e. the yellow line, hence we’re in for a bear’s trade.
- The Free Scalping System custom indicator changes from lime to red, signaling a sell.
- As usual, the Williams’ Percentage Range (14) indicator would be used to confirm reversal in trend.
Stop Loss For Sell Entry: engage your personal money management strategy, while placing stop loss below the bottom EMA_Trend_Indicator i.e. the bottom purple line.
Exit Strategy/Take Profit For Sell Entry:
Exit your position(s) when the following conditions are observed:
- The Williams’ Percentage Range (14) blue signal line spikes upward above the -80 level.
- The Free Scalping System indicator changes color from red to lime.
- When a bullish candle closes above the upper yellow colored EMA_Trend_Indicator line.
About The Trading Indicators
The EMA Trend Indicator Simple Day Trading Strategy resolves much around the custom indicator itself, which allows the indicator to signal confirmation of price change based on the use of two EMA plotted on different periods.
There’s also the Free Scalping System custom indicator that is a trend following indicator, which is able to do this via altering its color as shown in the example above.
Lastly, this efficient trading strategy deploys the Williams’ Percentage Range (14) to confirm trend reversal, thus allowing traders exit position while still profitable.