Hello Traders
Here is a simple and effective trading strategy you can use in your daily Forex trading. I am sure most of you have your own trading strategies however you must give this a try.
You can use this on any pair and time-frame. All you would need are two EMAs which are commonly available on all platforms.
Many traders use 2 moving averages on a chart and trade when they crossover. However since moving averages are lagging indicators most often the move has already happened when the cross takes place.
Rather lets look at this way use moving averages only to tell you the overall direction of the market. So here in this strategy we will use 2 moving averages in which one will tell us the trend and the other will work as support and resistance.
We will use 200 EMA for trend direction and a 34 EMA for support and resistance.
You will BUY when
1) Price is above the 200 EMA and 34 EMA.
2) The price comes down and bounces off the 34 EMA. (In this case 34 acts as support)
Sell when…
1) Price is below the 200 EMA and 34 EMA.
2) The price goes up and bounces off the 34 EMA. (In this case 34 acts as resistance)
There are few things I would like to mention.
This strategy works best on pairs which are trending.
Take out time to find out strong and weak currencies and apply this strategy.
You can be careful before major news events.
