Best Exponential Moving Average Forex Strategy
When it comes to being a profitable Forex trader, one thing that you definitely need to learn all about is the exponential moving average. Now, what we are here to learn today is one of the very best exponential moving average Forex trading strategies out there at this time.
For those of you who don’t know what EMAs or exponential moving averages are, no worries, because we will explain this in detail below. Moreover, what is also important to note is that the trading strategy that we are here to talk about today involves scalping, which is a very fast and short term type of trading that can put money into your pockets in just a few minutes.
As you will see below, the specific 3 exponential moving average line strategy that Andrew has created and employed to make consistent profits is indeed very fast, easy, and reliable. If you learn how to use the 3 EMA strategy that we are going to explain in great detail below, then you should have no problems making profits on a daily basis.
What’s an EMA?
Before we can talk about the best exponential moving average Forex scalping strategy, you first need to know what moving and exponential moving averages are. First, a moving average or a simple moving average is a technical analysis tool used in many types of trading, and this is used to identify the direction and momentum of a trend, thus allowing you to enter trades appropriately.
With a simple moving average, the closing prices of a security are added together and then divided by the number of closing prices (or periods) that were added together, thus providing you with a simple average of the closing prices over a given period.
The EMA or exponential moving average, on the other hand, places much more significance or importance on the most recent prices in the equation, thus making it more responsive to sudden and recent price movements, and therefore making it rather perfect for a short term 5 minute scalping strategy such as the one we are about to discuss.
The Best Exponential Moving Average Forex Scalping Strategy
Let’s get right to it and take a look at what this five minute 3 EMA forex scalping strategy entails, a strategy that you can use to make quick and easy profits on a daily basis. Keep in mind that everything we are talking about here today comes straight from Andrew’s video, where he explains all of this in great detail, and of course, illustrates everything with a live video tutorial that you can follow along with in a step by step manner.
If you follow the tips and rules that we are about to lay out for you, then this 3 exponential moving average Forex scalping strategy can definitely put money into your pockets. What is also really cool is that this is a strategy that you can use for any broker or trading platform.
So, the first thing that is important to note about this 3 EMA strategy is that in order for it to work, you need to have 3 exponential moving average lines on your chart. So, this is the first thing that you need to do, so withing your broker or trading platform of choice, go to the indicators tab, and then add three separate exponential moving average lines or EMAs.
Once you have added those three EMA lines to your char, the next thing that you need to do is to edit the settings of each of the three lines. Go to their individual settings, and set the first one to input 21 and close 0, the second to input 9 and close 0, and the third line set to input 13 and close 0. On that same note, while you are doing this, make sure that it is a 5 minute chart that you are doing this on. If your timeframe is either longer or shorter than 5 minutes, then this strategy will not function properly and you will most likely get a bunch of false signals.
Ok, so now comes the part where you need to keep an eye on the chart, the candlesticks, and those 3 EMA lines, because what you are looking for here is an are where the candlesticks do not come into contact with any of your 3 EMA lines for at least 40 minutes.
When you find this area where candlesticks are not touching lines, what you are looking for is where the first candle (the most recent candlestick) touches one of the EMA lines. When you see a candlestick touch the EMA line, count backwards by five candles, and out of those 5 candlesticks, what you are looking for is the highest or lowest one. If it is an upward trend, you are looking for the highest candlestick, and for a downward trend, you are looking for the lowest candlestick. This is your entry into the trade.
As you can see from the video with Andrew doing everything live in action, (his chart features an upward trend), Andrew places his trade according to the value provided by that highest candlestick. The final part of this process is of course closing or exiting the trade, the part that will put money in your pocket.
To close your trade, all you need to do, if there is an upward trend and you have placed a buy trade, is to close the trade at the next level of resistance. On the other hand, if you placed a sell trade for a market in a downward trend, then you close your trade when your position meets the next level of support. There you have it folks, how to make easy profits using a simple and effective 3 exponential moving average line Forex scalping strategy.
Exponential Moving Average Strategy For the Win – The Bottom Line
Now that you know how to use this 3 exponential moving average Forex scalping trading strategy, you can start making consistent profits on a daily basis!
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