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Moving Average Cross Trading Strategy
Moving Average Cross Forex trading strategy
is a simple system that is based on the cross of the two standard
indicators the fast EMA (exponential moving average) and the slow
EMA. You can also use our free
Adjustable Moving Average
Cross expert advisor to trade this strategy automatically in MetaTrader
platform.
Features
- Very easy strategy to follow.
- Simple indicators used.
- It's easy to set stop-loss.
- Moving averages are laggy can lag up to 10 bars.
- Ineffective during the flat markets.
Strategy Set-Up
- Any currency pair and timeframe should work.
- Add an exponential moving average to the chart, set its period to 9, apply
to Close, set color to red (optional) this is your fast moving
average (FMA).
- Add another exponential moving average to the chart, set its period to 14,
apply to Close, set color to blue (optional) this is your slow
moving average (SMA).
Entry Conditions
Enter Long position when FMA crosses SMA from below.
Enter Short position when FMA crosses SMA from above.
Exit Conditions
Stop-loss for Long positions should be set to the Low of the last candle
before the cross occurred. For Short positions to the High of the
last candle before the cross.
Take-profit should depend on the stop-loss and should be not less that
stop-loss. I recommend setting TP to 1.5 * SL or 2 * SL.
If another cross appears before the stop-loss or take-profit are triggered
close the position.
Example
As seen on the example chart, entry conditions are quite clear and with the
proper TP/SL ratio, this strategy can be quite profitable.
Warning!
Use this strategy at your own risk. EarnForex.com can't be responsible for
any losses associated with using any strategy presented on the site. It's not
recommended to use this strategy on the real account without testing it on demo
first.
Discussion:
Do you have any suggestions or questions regarding this strategy? You
can always
discuss
Moving Average Cross Strategy with the fellow Forex traders
on the Trading
Systems and Strategies forum.
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