This strategy will help you create a trading system, analyse market trends, and understand price movements easily.
Timeframe: all
Currency pairs: all
Market state: trending
Required indicators:
- Fast exponential moving average (4-period EMA)
- Slow exponential moving average (10-period EMA)
- Standard Moving Average Convergence-Divergence indicator (MACD, 12, 26, 9)
- Trend Oscillator: either Average Directional Movement Index (ADX, 14) for Metatrader 4/5 or Directional Movement (DMI, 14,14) for Trading View.
Use the following recommendations to choose the correct entry point for your trading positions.
Entry conditions for a short position (Sell):
1. 4-EMA is below 10-EMA
2. MACD is below zero
3. (–DI) has crossed above the (+DI).
Stop Loss (SL)
Place SL above the previous swing high.
Take Profit (TP)
Take your profit when the 4-EMA rises above the 10-EMA.
Entry conditions for a long position (Buy):
1. 4-EMA is above 10-EMA
2. MACD is above zero
3. (+DI) has crossed above the (–DI)
Stop Loss (SL)
Place SL below the previous swing low.
Take Profit (TP)
Take your profit when the 4-EMA drops below the 10-EMA.
