17 EMA in downward direction. Never forget that in trading no price is too high to buy, and no price is too low to sell. However, because the market goes down much faster, we sell on the 1st retest of the zone between 20 and 50 exponential moving averages after the EMA crossover happened. Step #1: Plot on your chart the 20 and 50 EMA. Currency pairs: All trendy pair. The assumption this strategy makes is that once a trend reversal has occurred, it will continue to move in the direction of the new trend, at least until the next support or resistance level, or Fibonacci level. By looking at the EMA crossover we create an automatic buy and sell signals. Now, we still need to define where exactly are we going to buy which, obviously brings us to the next step of the exponential moving average strategy. Time frame: For more pips, H1, H4 is perfect for this strategy. Do not close the position until the candle of the last period is closed.
The second rule of the exponential moving average strategy is the need for the price to trade above both 20 and 50 exponential moving averages and secondly, we need to wait for the EMA crossover which will add more weight to the bullish case. Sell orders when the short-term EMA crosses below the long-term EMA. Before we go any further, we always recommend writing down the trading rules on a piece of paper. The oldest form of technical analysis and one of the most popular trading indicators used by thousands of traders is the exponential moving average. RSI (21) above 50 mark suggests an uptrend, below downtrend. The most commonly used EMAs by forex traders are the 5, 10, 12, 20, 26, 50, 100, and 200. Settings for the EMA crossover forex strategy. In most software from forex brokers you can easily plot the EMA on the forex charts.