![]() ![]() As you gain experience, you will tend to use other tactical trading plays or trading strategies (breakouts, pullbacks) to enter the trend if you missed the actual crossover trade trigger. Triggered long but trade appears to be in danger of taking a close upon the cross of the moving averagesĪs you can see, the 5 ema and 8 ema crossover trading strategy is pretty straight forward.This short trade does not trigger as price never passed the low of the setup candlestick.Fibonacci 1.272 profit target 376 pips or 3.5R Using the crossover at 3, the pips total 298 pips. Using a resistance structure (see #1), this trade banked 256 pips (2.4R). You can trade as an “always in” trading strategy and this trade sets up with a spinning top candlestick but you are triggered in on a momentum candlestick.If you used the moving average crossover as an exit and exiting at the close, this short trade banked 178 pips or a 1.38R I am using the conservative entry of setting a sell stop below the low of the setup candlestick.This is a daily chart of the AUDUSD with our 5 ema and 8 ema moving averages applied. Use a reversal chart pattern to signal your trading exit.Take Profit: You can use a couple of options for take profit If that entry candlestick is a narrow range candlestick, use the previous candlestick. ![]() Stop Loss: Set your stop 5 pips above or below the entry candlestick. Short Entry Rules: When 5ema crosses 8ema to the downside, you can sell stop the low of the candle that turned the moving averages or simply enter at close. Long Entry Rules: Wait for 5 ema to cross 8 ema to the upside. You can buy stop the high of the candle that turned the moving averages or simply enter at close. Keep in mind this is a short term swing trading strategy so keep your profit expectations in check. If the the 5 ema is below the 8 ema, we will look for short trades. ![]() If the 5 is above the 8, we will look for long trade entries. The short term moving averages crossing over indicates the short term trend has changed and we want to trade in the direction of the cross. You can use long term exponential moving averages to take advantage of a “macro view” or short term averages such as the one discussed here, 5 EMA And 8 EMA. Moving average crossovers are a popular method of approaching a trading strategy. ![]()
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