50 EMA Forex Swing Trading Strategy

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50 EMA Forex Swing Trading Strategy

This is a swing trading strategy that is very easy to implement and can be applied to any currency pairs. This system works in all timeframes. This is only effective during a trending market.

Rules for buying:

  1. The price must break above the 50 EMA.
  2. The candlestick that breaks the 50 EMA is the entry candlestick.
  3. Place a buy stop order 5 pips above the high of the entry candlestick.
  4. Place stop loss 5 pips below the low of the entry candlestick.

Rules for selling:

  1. The price must break below the 50 EMA.
  2. The candlestick that breaks the 50 EMA is the entry candlestick.
  3. Place a sell stop order 5 pips below the low of the entry candlestick.
  4. Place stop loss 5 pips above the high of the of the entry candlestick.

Trade Management:

There are options to manage and exit your position and these are:

  • Moving the stop-loss to the breakeven. This option usually stops out your position.
  • You can do trail stop. Just move the stop loss at the previous swing.

Advantages:

  • Comprehensive
  • This is good to use in a trending market.

Disadvantages:

  • This is a lagging indicator. The price will already make a move before this indicator can give a signal.
  • This is not good in a non-trending market.

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