The Moving Average Cross Forex Trading Strategy

The moving Average Cross foreign exchange trading strategy is a transparent system that is established on the cross of the two approved indicators: the quick EMA (exponential moving average) and the gradual EMA.

Features

  1. Very simple strategy to pursue.
  2. Easy indicators utilized.
  3. It is simple to establish stop-loss.
  4. Moving averages are very slow-can drag up to 10 bars.
  5. Unprofitable during the smooth markets.

Strategy Establishment

  1. All currency pair and lapse of time should work.
  2. Include a rapid change to the diagram, establish its span to 9, employ to close, establish color to red (optional)- this is your rapid moving average (FMA).
  3. Include another rapid change moving average to the diagram, establish its span to 14, employ to close, establish color to blue (optional) – this is your gradual moving average (SMA).

The Entry Conditions

Introduce long positions when FMA crosses SMA from beneath.

Introduce short positions when FMA crosses SMA from beyond.

The Exit conditions

The stop-loss for long positions should be established to the low of the closing candle in advance to the cross manifest. For short positions- to the high of the closing candle ahead of the close.

Take-gain should solemnly depend on the stop-loss and should not be deficient than that stop-loss. I highly advise allocating TP to 1.5 * SL or 2 * SL.

If one more cross show up before the stop-loss or take-gain is generated, close the position.

For Instance

moving-average-cross-strategy

As seen on the model chart, entry conditions are completely clear and with the suitable TP/SL ratio, this strategy can be actually profitable.

Danger-SignUtilize this strategy at your own risk. WindsorForex.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.

 

 

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About The Author

Mike N

Financial Trading Systems Design Expert

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