Forex Double EMA Crossover Strategy For Metatrader 5

The Forex Double EMA Crossover strategy for Metatrader 5 uses an exponential moving average type indicator (DEMA) to determine buy/sell price action on any pair.

Exponential moving averages are known to react faster to recent price changes, thus making them an easy fit for a trend-seeking forex strategy.

The strategy uses the popular DEMA and CCI technical indicators for finding and trading the best trends.

Not only does the strategy help verify the underlying trend, it can also assist investors in knowing when to enter and exit your market orders for good profits.

One great way to determine the settings that best suits you is to tweak the various indicator settings until you find the most suitable mix.

Trade Setup 

MetaTrader 5 Indicators: Generalized double DEMA.ex5 (Double DEMA period=28), Commodity Channel Index.ex5 (Parameters Modified; Period=42)

Trade Style: Scalping, day trading, swing trading

Trading Sessions: London | New York | Tokyo

Currency Pairs: Majors, cross pairs, exotics

Platform: Metatrader 5 (MT5)

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Download the Forex Double EMA Crossover Strategy For Metatrader 5

Buy Trade Example: EURJPY, H1 Chart

Fig. 1.0

Trading Strategy Rules For Buy and Sell Trades Explained

Buy Entry

Enter a buy trade if the following trading conditions are met:

  1. If the light sea green line of the Commodity Channel Index Metatrader 5 forex indicator breaks& hoversabove the 0.00 signal level (see Fig. 1.0), price is said to be pressured to the upside, as such a buy trigger will suffice.
  2. If the medium sea green line of the Generalized double DEMA custom indicator stayspositioned slightly below the candlesticks as shown on Fig. 1.0, the general market sentiment is said to be bullish, therefore a buy alert will suffice.

Suggested Stop Loss for Buy Entry: Place stop loss below support.

Suggested Exit Strategy/Take Profit for Buy Trade

Exit the buy trade if the following trading conditions are met:

  1. If while a bullish trend is ongoing, the light sea green line of the Commodity Channel Index forex indicator dips below the 0.00 horizontal level (refer to Fig. 1.0), it typifies weaning bulls power, hence an exit or take profit will do.
  2. If the medium sea green line of the Generalized double DEMA indicator reverts to dark orange during the course of a bullish signal, bulls power is said to be weaning, therefore an exit or take profit stance is apt.

Sell Entry

Open a sell trade if the following trading conditions are met:

  1. If the light sea green line of the Commodity Channel Index forex indicator dips& hoversbelow the 0.00 horizontal level as illustrated on Fig. 1.1, price is said to be dragged lower i.e. a trigger to sell the currency pair of interest.
  2. If the dark orange line of the Generalized double DEMA custom indicator gets positioned somewhat above the price bars as illustrated on Fig. 1.1, the overall market sentiment is said to be bearish, therefore a trigger to go short on the selected currency pair.

Suggested Stop Loss for Sell Entry: Place stop loss above resistance.

Suggested Exit Strategy/Take Profit for Sell Entry

Exit the sell trade if the following trading conditions are met:

  1. If the light sea green line of the Commodity Channel Index forex indicator surges above the 0.00 horizontal level during the course of a bearish trend, bears power is said to be diminishing, as such an exit or take profit stance is recommended.
  2. If the dark orange line of the Generalized double DEMA custom indicator changes to medium sea green while a bearish trend is running, bears are said to be leaving the market increasingly, therefore an exit or take profit stance is advised.

Sell Trade Example: EURJPY, H1 Chart

Fig. 1.1

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Download the Forex Double EMA Crossover Strategy For Metatrader 5

MT5 Trading Indicators Used For This Strategy

The Generalized double DEMA is a technical indicator for Metatrader 5 that is designed to shrink the amount of lag time that is present in traditional moving averages.

The Commodity Channel Index is a momentum based indicator that falls under the oscillator family.

Regardless of its name, the CCI is not exclusively designed for the commodity market but can also be applied in the forex market to gauge overbought/oversold conditions, along with spotting trends.

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