Multiple EMA-CCI Trading Strategy – This is a very straightforward strategy, yet incredibly effective and easy for beginner traders to grasp.
In this trading strategy, we’ll be using just two indicators: EMA and CCI.
I believe this strategy is fantastic because it’s easy to implement due to its simple concept. It’s this simplicity that consistently helps its users reap profits in the stock and forex markets.
Let me explain the role of EMA, or Exponential Moving Average, in this strategy.
The EMA’s function here is to determine the direction of the current market trend. The difference from the commonly known use of EMA in strategies is that traders employ six EMAs with settings close to each other, ranging from 4-period EMA to 24-period EMA. So, these EMA lines consist of a 4-period EMA, 8-period EMA, 12-period EMA, 16-period EMA, 20-period EMA, and 24-period EMA.
As you can see here, with this unique EMA setup, we can easily spot the current trend. Just by looking at this, you can probably tell that this trading strategy is indeed quite dependable. That means, from now on, you won’t be puzzled by market trends anymore.
Now that you have a very clear understanding of the market trend through the six Exponential Moving Average lines we discussed earlier, we’re at the stage of finding the most accurate trade signals.
The right trade signal, after knowing the market trend, involves waiting for a trend correction. You can find these trend corrections on smaller time frames or on the same time frame.
For instance, if the daily time frame indicates a bearish trend, you can look for trend corrections on the daily, 4-hour, and 1-hour time frames.
- Download “TraderVersity-EMACCIsystem” (Zip/RAR File).
- Copy mq4 and ex4 files to your Metatrader Directory …/experts/indicators/
- Copy the “TraderVersity-EMACCIsystem.tpl” file (template) to your Metatrader Directory …/templates /
- Start or restart your Metatrader Client.
- Select Chart and Timeframe where you want to test your forex system.
- Right-click on your trading chart and hover on “Template”.
- Move right to select “TraderVersity-EMACCIsystem” trading system and strategy
- You will see “TraderVersity-EMACCIsystem” is available on your Chart
As you can see on this chart, this part clearly represents a bullish trend.
Then, there’s a price correction (RED CIRCLE). There are two crucial things to note in this correction:
- The EMA lines don’t cross over perfectly, indicating that the bullish trend hasn’t shifted to bearish.
- The CCI line dips below the 0 level for a while and then crosses back above it.
In this situation, what you should do is enter the market immediately on the next candle by opening a BUY position. After opening the BUY position, you should set a stop loss below the 24-period EMA line on the candle formed during the CCI Bullish Cross.
On the flip side, as you can see on this chart, this part clearly represents a bearish trend.
Then, there’s a price correction (BLUE CIRCLE). Two important things to note in this correction:
- The EMA lines don’t cross over perfectly, indicating that the bearish trend hasn’t shifted to bullish.
- The CCI line crosses above the 0 level for a while and then crosses back below it.
In this situation, what you should do is enter the market immediately on the next candle by opening a SELL position. After opening the SELL position, you should set a stop loss above the 24-period EMA line on the candle formed during the CCI Bearish Cross.
The most important thing in this strategy is that the combination of these EMAs will keep traders aligned with the market trend and prevent them from entering the market against the trend.
The advantage of this consistency is that it increases a trader’s probability of winning because trend trading inherently has a much higher chance of success compared to counter-trend trading.