Forex Strategy With ADX And Fast EMA Cross System

Ride the forex trend with ADX and exponential moving averages.

The strategy combines the popular ADX indicator with 200 EMA for trend direction and a short-term EMA crossover system for entry signals.

Chart Setup

Indicators: 200 exponential moving average, ADX with settings 12, EMA-Crossover_Signal with input settings (Fast 5, Slow, 6)
Preferred time frame(s): 30 min and above
Trading sessions: Any
Preferred Currency pairs: Any

Download

Download the Forex Strategy With ADX And Fast EMA Cross System for Metatrader 4.

USD/JPY Hourly Chart

adx-forex-strategy1

Here’s an example of a vailid buy trade setup on the USD/JPY chart. ADX +DI above -DI AND price above the 200 EMA AND positive EMA Crossover signal = BUY.

Trading Rules

Buy Rules:

  • Currency pair above the 200 EMA (bullish trend)
  • +DI above -DI (bullish confirmation)
  • Green up arrow EMA crossover signal (long entry signal)

Open buy order at the open of the next bar. Place stop at previous swing low or according to your own preferences.
I prefer to set two targets for this setup. Close first half at risk-to reward 1:1 and second half at 1:2.

Sell Rules:

  • Currency pair below the 200 EMA (bearish trend)
  • -DI above +DI (bearish confirmation)
  • Red down arrow EMA crossover signal ( short entry signal)

Open sell order at the open of the next bar. Place stop at previous swing high or according to your own preferences.
Similarly to the buy setup: I prefer to set two targets for this setup. Close first half at risk-to reward 1:1 and second half at 1:2.

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