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3 Step EMA Forex Strategy

Aug 21, 2014

The EMA lines are a very useful simple indicator to determine the direction of price movements, whether the trend is taking place or being ranging. When it comes to trending markets, traders have many options in regards to strategy. In this article we will see how to use EMA’s and how they can be used to create a complete strategy for Forex trends.

Talking Points:
  • EMA’s are weighted averages used in trending markets.
  • Find the trend with a 200 period EMA.
  • Time entries using a series of EMA’s utilizing smaller periods.
The EMA

Today’s strategy will revolve around the use of a series of EMA’s (Exponential Moving Average). These averages work the same as a traditional SMA (Simple Moving Average) by directly displaying an average of price for a selected period on the graph. However, the EMAs calculation incorporates a weight to put a greater emphasis on most recent price. This weight is placed to remove some of the lag found with a traditional SMA. This makes the EMA a perfect candidate for trend trading.

Now that you are familiarized with EMA’s let’s look at their uses in a trend trading plan.

Find the Trend

Before we enter into a trend based position, we need to know exactly which way that trend is heading. Below we have the GBPCAD on a 4Hour Chart. We can see the pair is making new highs while establishing higher lows, which makes the GBPCAD a strong candidate for an uptrend. This analysis can be confirmed by the use of a 200 EMA. Traditionally traders are bullish when price is above the 200 EMA and bearish if price resides under the average.

Given the information above, traders should look to buy the GBPCAD.

Learn Forex – GBPCAD 4Hour Trend & 200EMA


Timing Market Entries

Once market direction is identified, we can then use a series of EMA’s to enter the market. Below we can see that a 12 and 26 period EMA have been added to the graph. Since we are only looking to buy in an uptrend, it is important to identify areas where momentum is turning back in the direction of the trend. EMA’s can help us decipher this by identifying an area where our shorter period moving average crosses above the longer period EMA. At this point traders can look to buy the market.

Below you will find several sample buy entries using EMA’s on the GBPCAD. Remember, this process can be replicated for a downtrend by selling in the event that the 12 period EMA crosses below the 26.

Learn Forex – GBPCAD 4Hour Entries



Exiting Positions

Now that a trade has been opened, traders need to identify when it is time to exit the market. This is the third and final step in developing a successful strategy! Traders may choose a variety of stop/limit and risk reward combinations here to suit their trading needs. However, if you are already using a series of EMA’s they can be incorporated into your market exit. If we are buying on a return to bullish momentum, traders should close positions when momentum subsides. This can be found in an uptrend when price moves back and touches the 12 period EMA.

Stops should also be placed when trading with the trend. One simple methodology is to place stops under a swing high or low on the graph. This way in the event that the trend turns, any positions can be exited for a loss as quickly as possible. The graphic below will show an example of both scenarios.



Source: Walker England, Trading Instructor

The Bladerunner Forex Strategy

Aug 20, 2014

The Bladerunner forex strategy is a price action trading so it using tools like candlesticks, pivot points, round numbers and support and resistance levels when trading this strategy. But you can add more indicators if you think that they're useful or you feel more comfortable having some extra confirmation.

In this article we use the 20 EMA for confirmation indicator. Another alternative is to use the midline of the standard 20 Bollinger bands. Either works well, in fact you can use both to trade it as a Bollinger band EMA strategy.

The Bladerunner forex strategyp can be traded on any pair. It can also be traded on any time frame, but the examples below are from 5 min charts.

It can be traded at almost any time of the day, but obviously some times are more reliable than others. For example, the early part of the Asian session may provide a decent break out and retest giving an entry, whereas the Asian afternoon session can be very slow. Then, when London opens the price may be too erratic and volatile to give any reasonable entries for any strategy.

Later again, after the initial flurry of news announcements has passed and price has settled, you may once more get a reliable entry or two. You will therefore have to adjust this strategy to the times when you are able to trade it.

The strategy is named Bladerunner because the 20 EMA acts like a knife edge dividing price. If price is above the EMA, and respecting it, and retests the EMA, it will likely reject to the long side. And if price is below the EMA, and respecting it, and retests the EMA, it will likely reject to the short side. A few examples might help to clarify:







If price is below the 20 EMA, our bias is short and we would be looking for price to move up and hit the 20 EMA, reject and then move down.

However, if price pierces the 20 EMA and closes convincingly above it, we deem price to have switched polarity and now our bias changes to long. (This can be seen occurring at the right of the above picture). From now on we would be looking for price to move down and hit the 20 EMA, reject and then move up.

An example of one definite and one possible losing trade:




Essential entry parameters for this setup are:

  • Price must break out of consolidation or a range prior to entry, i.e. it must be trending
  • Price must then retest the 20 EMA successfully


What constitutes a successful retest?

If price is above the EMA it must bounce from and stay above the EMA; and vice versa for when price is below the EMA. More specifically: The first candle that touches the EMA should close on the same side of the EMA as it approached it from.

This then becomes the signal candle. Price has now rejected from the EMA and we are looking to see if the next candle confirms the move. If the next candle continues the move away from the EMA then this candle becomes the confirmatory candle. This is a simple way to trade the strategy; if you want to play it safer you could insist on a recognisable forex candlestick pattern occurring to confirm the trade.

n.b. if the Bladerunner seems simplistic, it is because forex price action and current fundamentals are factored into trading decisions. No entry is ever taken based purely on price having rejected from the 20 EMA.

Impotant Notes:

  • Always look for a confluence of reasons to enter the trade. For example, it’s safer to have more than just a rejection from the 20 EMA. Ideally, you would like to see this happening at the same place as an old support/resistance level, pivot level or other significant price impact point.
  • Always be on the lookout for impending news announcements when trading this setup, especially on the lower time frame charts. I generally will not enter any trade within 30 to 45 mins before a scheduled news event, and will always wait at least 15 mins after the event before considering a trade.
  • Always trade with the direction of the current trend, as determined by which side of the EMA or polarity indicator price is currently on.


Order Placement:

(Note: the following parameters call for spreading your entry across two orders, but nowadays I have found that it is simpler for me to just enter one position/order per trade. However, many traders prefer to have their trade split across two positions, as this enables them more flexibility in their exits.)

A suggested approach is to open 2 orders when trading this strategy. The orders are as follows:

For a long entry:

  • 2 buy stop orders are placed with entry 2 pips above the confirmatory candle.
  • Orders expire at the start of a new candle. For example, if entering limit orders on the five-minute chart, those orders will expire at the start of the next five-minute candle, unless they have already been filled by price action on the current five-minute candle.
  • The stop loss is placed 2 pips below the signal candle that touched the 20 EMA. This particular rule is not set in stone, you may place the stop behind a recent swing point if you believe that would give a more realistic stop size.
  • The take profit for the first order is set at an amount equivalent to the risk in pips. For example, if the risk in the trade is 20 pips, the first order’s take profit target will be set at 20 pips.
  • The take profit for the second order is set at an amount equivalent to double the risk in pips. So, to use the above example, the take profit on the second order would be set at 40 pips.

For a short entry:


  • 2 sell stop orders are placed with entry 2 pips below the confirmatory candle.
  • Orders expire at the start of a new candle. For example, if entering limit orders on the five-minute chart, those orders will expire at the start of the next five-minute candle, unless they have already been filled by price action on the current five-minute candle.
  • The stop loss is placed 2 pips above the signal candle that touched the 20 EMA. This particular rule is not set in stone, I may place the stop behind a recent swing point if I believe that would give a more realistic stop size.
  • The take profit for the first order is set at an amount equivalent to the risk in pips. For example, if the risk in the trade is 20 pips, the first order’s take profit target will be set at 20 pips.
  • The take profit for the second order is set at an amount equivalent to double the risk in pips. So, to use the above example, the take profit on the second order would be set at 40 pips.


Trailing stop:

Once price has moved in favour of the trade by an amount equivalent to the initial risk, one of the orders is closed (due to its reaching take profit 1 level) and the stop loss on the remaining order is moved to breakeven. Using the above examples, once price moves 20 pips in favour of the trade, the first order is closed and the stop loss on the remaining order is set to breakeven.

This remaining order’s stop is then left at breakeven until the market closes the trade, either by reaching the profit target or by stopping out at breakeven. Again, this rule is not set in stone: there may be times when you may wish to continue trailing the stop beyond breakeven, for example, when a news announcement is imminent.


Morning 2 Trendlines Forex Strategy

Mar 3, 2014

This forex strategy is very simple but it proved give profitable trade. Only use 2 lines trendline tool during in the morning or starting of the day. We recommend you have to first understand how to use the trendline line tools in Metatrader 4. And try this forex strategy in virtual account first before applied for real trading

How to Make Morning 2 trendlines

1. Open MT4 Chart on 1H time frame, recommeded pair are EURUSD or EURJPY
2. Use the line separator period to see prices from day to day
3. Pull trendline from Highest yesterday to the Highest of the first candel on this day.



4. Pull trendline from Lowest yesterday to the lowest of the first candel on this day.




Open Position Rules

After you make 2 trendlines, now wait a second candel close on this day .

1. Open BUY if second candel close above the trendline.
2. Open SELL if second candel close below the trendline
3. If the second candel doesn't close above/below the trendline, then wait for the next candel.
4. Use your money management to take profit and stop loss. You can take profit near supply and demand or support resistance line






5 Minutes Momo Forex Strategy

Feb 20, 2014

The name of the system is 5 Minute Momo Forex Strategy. This forex system was introduced at "High Probability Trading Setups for the Currency Market" By Kathy Lien and Boris Schlossberg.  It is a simple Scalping Strategy using indicators of EMA and MACD.



Setup
EUR/USD 5 Minutes timeframe
EMA period 20
MACD  (12,26,9)


Open Buy Position When:

  1. Look for currency pair to be trading below the 20-period EMA and MACD to be negative
  2. Wait for price to cross above the 20-period EMA, make sure that MACD is either in the process of crossing from negative to positive or have crossed into positive territory no longer than 5 bars ago
  3. Go long 10 pips above the 20-period EMA
  4. For aggressive trade, place stop at swing low on 5 minute chart. For conservative trade, place stop 20 pips below 20-period EMA
  5. Sell half of position at entry plus amount risked, move stop on second half to breakeven
  6. Trail stop by higher of breakeven or 20-period EMA minus 15 pips


Open Sell Position When

  1. Look for currency pair to be trading above the 20-period EMA and MACD to be positive
  2. Wait for price to cross below the 20-period EMA, make sure that MACD is either in the process of crossing from positive to negative or have crossed into negative territory no longer than 5 bars ago
  3. Go short 10 pips below the 20-period EMA
  4. For aggressive trade, place stop at swing high on 5 minute chart. For conservative trade, place stop 20 pips above 20-period EMA
  5. Buy back half of position at entry minus amount risked, move stop on second half to breakeven
  6. Trail stop by lower of breakeven or 20-period EMA plus 15 pips

Tom's Simple 7 Strategy

Feb 11, 2014

Tom's Simple 7 forex strategy using EMA indicator setting 7 (close) as a determinant in taking open position. This scalping forex strategy work good on any time frame. It's a simple strategy but good enough to read the direction of price movement. Premises should be combined with higher timeframe. And you can add your indicators if you like.


How to setup the chart:

  • Set a 7 close price EMA.
  • Set a 50 close price EMA
How to Trade

If the 7 EMA is lower than the 50 EMA trade only the short opportunities for maximum risk/reward. So if the closed candles are below the 7 EMA trade short.

If the 7EMA is higher than the 50 EMA trade only the long opportunities for maximum risk/reward. So if the closed candles are above the 7 EMA trade long.


This is a trend-based strategy. The 50 EMA is there to indicate an increasing, decreasing or consolidation trend. I would not be interested in trading this strategy in a period of consolidation.

Warning:
These instructions expect that you have basic trading experience and is not meant to teach or train you in trading derivatives or forex. With that said, you can use this method on any timframe, but since we are differentiating the positions above and below the 7 EMA that means you will have to monitor your trade constantly after you enter it.

Note:
This method was left simple to allow people to use it as I basically set it forth, but also to allow you to adjust it to meet your needs and allow room for your new ideas based on it.

Dolly Forex System Indikator Ver 13

Aug 30, 2013

Dolly Forex System was developed in Forex TSD forum and now Dolly indicators has build in version 13. Until now, this indicator was claimed still give profitable result, and it had shared on many forex forum.

Forex Dolly method is very simple, wait for break buy or break sell, directly open position when meet this condition. The profit targets was set in 1st and 2nd target. Thid Dolly indicator suitable in any currency pair on H1 timeframe.



This picture was taken on April 11, 2012 on GBPUSD Chart. Price hit 1st and 2nd target at once.


DOWNLOAD Dolly Forex System Ver 13  Pass: www.proforexstrategy.com

Extract and put Dolly indicator in your indicators folder on your Metatrader 4 platform.

Source: Forex TSD

Genesis Matrix Trading System

Jul 3, 2013

This forex strategy use Heiken Ashi candles as the main indicator. This is because
1. HA candles tend to smooth out a lot of the 'noise' associated with trading the M5 chart
2. It prevents you becoming biased to the long or short side due to traditional Japanese candlestick patterns and formations, which are inherently unreliable on the small Time Frames (TF).

Though looks like a simple forex strategy but this strategy is not for new beginner trader. At least you already know how trading with Metatrader for a few months.
Genesis Matrix Trading System works on all time frame but suggested using the M5 or M15. Works best in a trend rather than a ranging market. Can use in any pair. Gold and Oil work as well also.

Genesis Matrix Trading System


This strategy is based on the following Genesis indicators :
• Genesis Matrix
• Heiken Ashi candles
• EMA 5 (yellow line)
• M5 stochastic
• M15 MTF stochastic
• M5 Arrow
• M15 MTF Arrow

ENTRY RULES

ENTRY 1 : Standard Genesis LONG/SHORT rule
1) 4 matrix dots with the same colour after the current bar is closed.
2) M5 stoch crossover and moving out from 20-80 overbought levels.
3) HA bar open above/below EMA5.
The M5 Arrow…..now we don’t always wait for the arrow because in a sudden PA reversal it may be late…but….if a M5 arrow doesn’t arrive within the next couple of candles, the trade must be monitored more closely for a possible early exit.

ENTRY 2 : 5_15 Genesis LONG/SHORT rule
This entry is the same as standard one but we use M15 arrow as a filter and we enter in the market only in the direction of the M15 arrow. As you can see from the following statistics, this increases the return of the system using either exit strategy.

Download Genesis Matrix Trading System eBook
Download Indicator and template

Learn more about this System at Forex Factory


Renko Chart and Magnetis Line

Jan 20, 2013

Renko Chart and Magnetis Line forex strategy is simple strategy but very profitable. It has several indicators used to predict price direction and knowing when price has reached over bought or over sold. Can be used in many pairs like EURUSD and GBPUSD.

What you need to setup this forex strategy?
All you need are indikators+Renko EA and guide how to install this indicator on your metatrader chart. You can download this indikator here Renko Chart and Magnetis Line Indicators

Open BUY Position :

  • Observe the price must touch first magnetic white line (150)
  • Shown blue SEFC Indi at least 2 boxes
  • Red candle become blue candle (change in trend)
  • MA Yellow Colour
  • Blue uni cross appeared

Confirm to BUY
When all the preparations are being match with the rule above
Then: Blue + aqua candle was already above the Blue MA Line. BUY position can be done. SL 50 TP 50-100 pips

Open SELL Position :

  • Observe the price must touch first magnetic white line
  • Shown RED SEFC Indi at least 2 boxes
  • Blue candle become Gold candle (change in trend)
  • MA Yellow Colour
  • Red uni cross appeared

Confirm to SELL
When all the preparations are being match with the rule above
Then: Red + gold candle was already below the Blue MA Line. SELL position can be done. SL 50 TP 50-100 pips




If the price touches the line magnetic red / blue (Magnetis 300).
BUY and SELL can be taken with the same rules as above, the differences are we use larger TP, it is 100-150 pips.  Happy Trading :)

Kijun-Sen Bandit Forex Strategy

Nov 29, 2012

“Kijun-Sen Bandit” Forex Strategy is a simple but powerful strategy in forex trading. Work fine in H1 Time frame for major currency pairs: EURUSD, GBPUSD, USDJPY and USDCHF.

Indicators: 
  1. Kijun-Sen (26,9) - A key indicator in this forex strategy, because it enables the point of equilibrium in the market.  
  2. Exponential Moving Average EMA (8) - red and EMA (24) - blue. 
  3. The indicator forex BBands_Stop_v1 - based on Bollinger Bands. It allows you to define stop-loss level, a trend and reverse signal in the market. 
  4. ADX (14), with set at levels 20, 30 and 40. 
  5. Forex Indicator - MACD (12,26,9). 
  6. Stochastic Oscillator - Stochastic (30,10,10), drag and placed it with MACD. ADX  was used to confirm a trading signals - determine the yield rates from the overbought and oversold (the intersection with the levels: 20 and 80).

Buy when:

  1. The price rose above the indicator line Kijun-Sen (yellow line) 
  2. Red EMA (8) crosses the blue EMA (24) from the bottom to up. 
  3. The indicator BBands_Stop_v1 draws under the price of big red dot (hereafter becomes a line with points). 
  4. ADX line and the line of DI should over its level 20 and growing. 
  5. The histogram of the MACD indicator is located on the positive side (above its zero line).
Sell When:
Price and indicator move opposite the BUY rule.

Stop Loss:
For safety stop-loss order should be set higher by 1-2 ticks level indicator forex BBands_Stop_v1. And then it should move forwards prices higher next traced the points of the same indicator (BBands_Stop_v1). 

Close Position:
To closig position should be in any of the 2 cases: 
  1. Candle closed at the opposite side of the indicator Kijun Sen. 
  2. Reverse the intersection of 2 exponential moving averages. For opening and closing on sale of acting opposite rule. 
Addendum: Move your stop loss to breakeven after reached 20-30 points in the direction of trade position. And also, if you wish, you can close part of the position.


Download Kijun-Sen Forex System Indicator:    

BBMA Forex Strategy

Sep 25, 2012

BBMA or Bolinger Band + Moving Average forex system is a pretty popular strategy these days. Many traders use this strategy and they find it’s quite helpful to predict the price movements. Mainly to predict the big trend and find where and to where prices will move.

This forex strategy can be used on any time frame but It’s recommended used on timeframe H4 and H1 to know the big trend anda use M15 for make entry decision. On pair EURUSD, GBPUSD or USDCHF.




Setup the Indicators on your chart 
  1. Add Bolinger Band Period 20, Deviation 2 
  2. Add Bolinger Band Period 20, Deviation 1 
  3. Add Moving Average Period 5, MA method : Linear Weighted, Color : RED, Apply to : High 
  4. Add Moving Average Period 5, MA method : Linear Weighted, Color : PURPLE, Apply to : Low 
  5. Add Moving Average Period 55, MA method : Expotinential, Color : Aqua, Apply to : Close 

How to trade 
  1. Determine the big trend by looking the Moving Average (MA 55) on timeframe H4 and H1, look if the candel prices is below candlestick or above. If they're below of MA 55 then we are going to find any chance to sell on TF M15. And vice versa if they're above of MA 55 then we're going to find any chance to buy on TF M15. 
  2. In time frame M15 the best signal for entry when the candlestick touch upper or lower bollingger band, Especially when you see good signs for candel reverse like doji or long shadow. 

It’s very recommended to use this forex strategy using your demo account until you familiar with it at least 3 months. After that you can go with your live account. Happy trading…!


Download BBMA indicator :  BBMA indicators and Template


Credit : dollarsmagic from mt5 forum
 
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