EMA Crossover Signal Forex Trading Strategy – If the moving averages cross over one another, it could signal that the trend is about to change soon, thereby giving you the chance to get a better entry. By having a better entry, you have the chance to bag more pips!
If you had shorted at the crossover of the moving averages you would have made yourself almost a thousand pips!
Of course, not every trade will be a thousand-pip winner, a hundred-pip winner, or even a 10-pip winner.
It could be a loser, which means you have to consider things like where to place your stop loss or when to take profits.
You just can’t jump in without a plan!
- Time Frame: M5 or higher
- Currency Pairs: GBPUSD, GBPJPY, EURUSD
- EMA Crossover Signal
- Daily Data
- Price Channel Stop
- BBands Stop
- Relative Strength Index
- Download TraderVersity.Com-EMACrossOverSignalSystem (Zip File)
- Copy mq4 and ex4 files to your Metatrader Directory …/experts/indicators /
- Copy the “TraderVersity.Com-EMACrossOverSignalSystem.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.Com-EMACrossOverSignalSystem
- You will see “Exponential Moving Average (EMA) Crossover Signal System” is available on your Chart
One thing to take note of with a crossover system is that while they work beautifully in a volatile and/or trending environment, they don’t work so well when the price is ranging.
You will get hit with tons of crossover signals and you could find yourself getting stopped out multiple times before you catch a trend again.
- EMA Crossover Signal: Green “UP” Arrow
- Price Channel Stop: Blue line
- X-NonLagMA: Blue line
- BBands Stop: Blue histogram
- X-ArrZZx2: Blue lines
- Relative Strength Index: Upward and above level 55 line
- EMA Crossover Signal: Red “DOWN Arrow
- Price Channel Stop: Red line
- X-NonLagMA: Red line
- BBands Stop: Red histogram
- X-ArrZZx2: Red lines
- Relative Strength Index: Downward and below level 45 line
You must keep in mind that the lagging nature of moving averages, even EMA’s, will not enable picking tops and bottoms.
That is not a bad thing as times when the trend is changing can make for some sloppy trading conditions.