Last Updated on May 13, 2025 by Tim Morris

200 EMA Forex Swing Trading Strategy

The 200 EMA swing strategy is a comprehensive strategy suited for beginners. The 200 EMA or exponential moving average helps traders determines the trend. EMA 200-period is the most popular indicators that traders uses, that is why we are also going to use this indicator and period.

Downtrend and Uptrend:

Downtrend: The price is below 200 EMA.
Uptrend: The price is above 200 EMA.

How it works:

1. Put first the 200 EMA in the chart and then check the trend. The trend in the daily timeframe is the main trend.
2. Look at the trend on 4-hour if it has the same trend with the daily chart.
3. Look at 1-hour and see if it has the same trend with 4-hour and daily chart.
4. It is in the 1-hour chart that you make your entry decision.
5. On the 1-hour chart, wait for the price to touch back to the 200 EMA and enter on the reversal. You can identify reversal through the reversal candlestick.
6. If you are thinking of a sell position, place sell stop order 3-5 pips below the low of the reversal candlestick and set stop loss 10-15 pips above the high of the reversal candlestick.
7. If you are thinking of a buy position, place buy stop order 3-5 pips above the high of the reversal candlestick and set stop loss 10-15 pips below the low of the reversal candlestick.
8. Target profit is at the previous swing high or low on the 1-hour timeframe, or you can trail the stops by moving the stop loss if the market move in favor of your position.

Take note that the 3 timeframes must be in the same trend. If one of these timeframes has a different trend, then there must be no trade.

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