Moving Average Crossover Strategy That Absolutely Work Awesome
Strategy
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Moving Average Crossover Strategy That Absolutely Work
Moving Average Crossover strategy for Forex Trading — is a simple system that is based on the cross of the two standard indicators — the fast EMA (exponential moving average) and the slow EMA.
Features Advantage:
• Very easy strategy to follow.
• Simple indicators used.
• It’s easy to set stop-loss.
Features Disadvantage:
• Moving averages are laggy — can lag up to 10 bars.
• Ineffective during the flat markets.
Strategy Set-Up
1. Any currency pair and time frame should work.( for daily traders we advice to use 2 or 4 hours charts )
2. Add an exponential moving average to the chart, set its period to 9, apply to Close, set color to red (optional) — this is your fast moving average (FMA).
3. Add another exponential moving average to the chart, set its period to 14, apply to Close, set color to blue (optional) — this is your slow moving average (SMA).
Entry Conditions
1. Enter Long position when EMA crosses SMA from below.
2. Enter Short position when EMA crosses SMA from above.
Exit Conditions
Stop-loss for Long positions should be set to the Low of the last candle before the cross occurred. For Short positions — to the High of the last candle before the cross.
Take-profit should depend on the stop-loss and should be not less that stop-loss. I recommend setting TP to 1.5 * SL or 2 * SL.
If another cross appears before the stop-loss or take-profit are triggered close the position.
Example
As seen on the example chart, entry conditions are quite clear and with the proper TP/SL ratio, this strategy can be quite profitable. You can even chose the SL as the crossing point.
Warning!
Use Moving Average Crossover Strategy at your own risk. pipschart.com can’t be responsible for any losses associated with using any strategy presented on the site. It’s not recommended to use this strategy on the real account without testing it on demo first.
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