Forex Trading Strategy with EMA(34) and EMA(50)

This particular forex trading strategy is not new and there are several traders who use it in order to identify intraday forex signals.

When we use a forex trading strategy, wish to acknowledge inside the price charts, that point in which, if we place a trading order in the market will have the chances on our side to make profit while at the same time the risk we take will be limited .

The forex trading strategy includes:

• EMA(34) - Exponential Moving Average of thirty-four (34) periods. Apply to close. 
• EMA(50) - Exponential average of fifty (50) periods. Apply to close.

With this forex trading strategy, all traders are looking to exploit the cross between the two exponentially moving averages.

After locating the cross will continue  to evaluate the cross and if the assessment is positive, then we have an entry point, namely a forex signal, while in case of a negative evaluation we will remain out of the forex market waiting for another forex signal.

The forex trading strategy is used at 15m, 30m, and 1h charts.

Buy Rules 

According to market rules applicable in the specific forex trading strategy should open a buy (Long) position when:

• EMA (34) makes cross upwards EMA (50), this means that moves over the EMA (50).
• When the previous rules is in force, we have to wait to become a retracement to the region of the EMA (34) and EMA (50).
• The forex trading strategy defines as entry point (signal forex), that point in the region of EMA (34) and EMA (50) where the price will find support and starts again to move in the direction of cross.

Is at the discretion of each trader to use an indicator or oscillator if considers that must filter cross between EMA (34) and EMA (50).

Stop Loss

You can specify the level of stop-loss with various ways. 

• From the lowest level of the candle after the retracement.
• Even from the position of EMA (34) and EMA (50).
• Perhaps than a certain level of support or resistance. 
• From a trendline that may have been formed.

Forex technical analysis is one that will help you to understand all the details of price action and also to identify all those factors and critical aspects in order to place correctly the stop loss level.

Close Long Position

According to the rules of forex trading strategy, we can close our long position when the EMA (34) will make downward cross the EMA (50).

Sell Rules

Exactly the opposite from buy rules.

Note : Always read and carefully observe the chart when the price reaches a significant resistance, support, pivot points, even when formed downward engulfing candles or possible reversal candles.

Important :We recommend that all investors to make test any forex trading strategy on a demo account for quite some time so that it becomes fully understood before implementation in a real account.

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