5 EMA And 12 EMA With 21 RSI Forex Swing Trading Strategy

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5 EMA And 12 EMA With 21 RSI Forex Swing Trading Strategy

This strategy is simple and doesn’t need much technical analysis. This strategy is based on EMAs and RSI. This is applicable to 1-hour and above timeframes. EMA indicators help identify a particular trend.

FOREX INDICATORS:

  • 5 EMA
  • 12 EMA
  • RSI 21

Buy Entry:

  1. 5 EMA must cross above 12 EMA. This indicates an uptrend.
  2. RSI Indicator must be above 50 level.
  3. It is suggested that you buy at the market price. You can also place a buy stop order above the high of the candlestick.
  4. Place your stop loss at least 2-5 pips below the low of the crossover candlestick.
  5. You can take profit based on a 1:3 risk and reward ratio or at the swing high.

Sell Entry:

  1. 5 EMA must cross below the 12 EMA. that’s an indication that the trend has changed to a downtrend.
  2. RSI indicator must be below 50 level.
  3. It is suggested that you sell at the market price. You can also place a sell stop order below the low of the candlestick.
  4. Place your stop loss at least 2-5 pips above the high of the crossover candlestick.
  5. You can take profit based on a 1:3 risk and reward ratio or at the swing low.

HOW TO MANAGE YOUR TRADE:

  • Protect your profit by trailing the stop. It means moving the stop loss if the market is in your favor. The best trail stop technique is moving the stop and place behind “bottoms” in a buy trade and above the “tops” in a sell trade.
  • You can also move the stop by a certain number of pips when price moves by a certain number of pips.

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