Fast Exponential Moving Averages (EMA) Forex Strategy

Here’s a really easy to follow forex strategy based on fast exponential moving averages.

Let me explain to you how it works.

I also give you some options on how to close your trades for profits.

Chart Setup

Indicators: 5 exponential moving Average (5 EMA), 12 exponential moving Average (12 EMA), 32 exponential moving Average (32 EMA)
Preferred time frame(s): 1 hour and above
Trading sessions: All
Preferred Currency pairs: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/CAD, USD/JPY EUR/JPY, GBP/JPY

Download

Download the Fast Moving Averages Strategy for Metatrader 4.

GBP/USD Hourly Chart Example

fast-moving-average-cross-strategy

Trading Rules

Buy Conditions:

  • 12 EMA crosses 32 EMA from below
  • 5 EMA crosses 32 EMA and 12 EMA from below

Open buy trade and immediately place stop below the most recent support area.

Price objective method 1: close the buy trade when 5 EMA crosses the 12 EMA from above (short-term bearish).

Price objective method 2: close the buy trade when you get a valid sell trade (not recommended).

Price objective method 3: close the trade for 100 pips (hourly chart), 225 pips (4 hour chart),…

Price objective method 4: Use risk to reward ratio method (i.e. risking 50 pips to earn 100).

The trading chart above provided us with 3 easy to spot trading signals.  

The first buy order was closed for 100 pips, the second sell order was also closed for 100 pips annd the third buy trade is still open (price objective method 2).

Sell Conditions:

  • 12 EMA crosses 32 EMA from above
  • 5 EMA crosses 32 EMA and 12 EMA from above

Open sell trade and immediately place stop above the most recent resistance area.

Price objective method 1: close the sell trade when 5 EMA crosses the 12 EMA from below (short-term bullish).

Price objective method 2: close the buy trade when you get a valid buy trade (not recommended).

Price objective method 3: close the trade for 100 pips (hourly chart), 225 pips (4 hour chart),…

Price objective method 4: Use risk to reward ratio method (i.e. risking 60 pips to earn 120)

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