What happens to price when, and after, it is trapped between the 20 ema and the 50 ema What happens to price when it crosses the 50 ema What happens to price when the 20 ema acts as support What happens to price when the 20 ema acts as resistance What the market is doing when the slope is down AND how STEEP that slope is What the market is doing when the slope is up AND how STEEP that slope is What the market is doing when the 20 ema is flat The slope of the averages The cross of the averages Price relative to the averages If you haven’t done already, you should study thousands of charts (daily and up) with the 20 ema and 50 ema moving averages on and note several things: Energy ALWAYS seeks balance through the path of least resistance. Remember we are dealing with energy both of the market and its traders.
Think of the 20 ema as equilibrium, or the balance line which is the point at which buyers and sellers AGREE on price. It should never be used in isolation and never be taken as “the last word”. Our use of the 20 ema is not as a trigger in any shape of form, but as one of the tools to help us in our decision making process. To a certain extent, the use of the 20 ema becomes, like Fibonacci retracements, a self fulfilling prophecy.
Some professional traders use the price and 20 ema as their method by buying a close above the 20 ema and selling a close below the 20 ema (don’t try this at home, as they say, as the Professionals also use filters to avoid whipsaws and “false” moves). Many of the little guys (us) use the 20 ema in some form or other in our trading. Some use it with the cross of another MA or MAs as a system. The 20 ema is used by most institutions, banks, funds and big boys as part of their trading. The Power of the 20 EMA and 50 EMA in Forex Trading This can be done by using Price Action at weekly areas of support / resistance.īy doing this it will make it so this strategy is not 100% automated but it should help to eliminate losses which could be avoided by being patient and using price action at support / resistance (PASR) using the weekly charts. Then I will wait to see if each pair is going to continue trending in the same direction or if we may see a potential reversal soon. IMPORTANT: I may look into disabling the EA after all 8 positions are opened per pair and wait until ALL stop losses or take profit targets are hit. Different time delays between opening new positions are currently being tested on multiple currency pairs.Ħ) SL 250 & TP 350 (Recommended SL & TP Parameters) If price is "stuck in between" the two EMA's then this tells us that market is probably ranging so it is best not to add any more positions.Ĥ) NO opposing positions should be opened no matter what (no hedging same currency pair with buy and sell positions)ĥ) Time Delay in between new positions should be at least 6-12 hours apart. Once price moves into OB / OS area then 1 position opens up.ģ) IF price moves in between the 20 EMA and the 50 EMA then NO positions should be opened until price breaks out above/below BOTH the 20 & 50 EMAs. We do not need to wait for H1 to close in OB or OS area. Above = BUY Below = SELLĢ) New positions are opened up using H1 Williams % Indicator when price is Over Bought / Over Sold. We have recommended Stop Loss and Take Profit parameters as well as delay between each new position, but they really all depend on each trader's personal preference.Ĭurrently testing this system on EUR/USD, EUR/JPY, CHF/JPY, USD/JPY, NZD/JPY, NZD/USD, AUD/JPY, AUD/USD, EUR/AUD, GBP/AUD, EUR/NZD, GBP/NZD, GBP/USD, GBP/JPY, EUR/CAD, USD/CAD, CAD/JPY, AUD/CAD, AUD/NZD, & EUR/GBP.ĭ1 - 20 EMA & 50 EMA Trend Strategy Rules & Parametersġ) Price needs to be above / below BOTH the 20 EMA and 50 EMA on the Daily chart. *Lot size is obviously going to be determined by risk tolerance, account size, max positions, and the amount of pairs being traded at any given time. Under the "Inputs" tab you will put in parameters including Lot Size, Take Profit, Stop Loss, Max Positions, and Delay Hours. Tick (if not) Enable Alerts, Allow Live Trading, Allow Dll imports, Allow import of External Experts.ġ5. Expert Advisor Property dialog box will appear.ġ3. Double click the file to attach it with your Chartġ1. Go to the Chart where you want to attach the EAġ0. The other files are there in case you want to have the same chart template as me.Ħ. You don't need to worry about installing any of the files except for the "D1 20 EMA & 50 EMA" file.
The EA can be found at the bottom of this post along with all of the other indicators that I use including the MACD, Moving Averages, and my personalized template. I'm currently BETA testing a new system which uses the 20 EMA and the 50 EMA on the D1 chart.