SIMPLE FOREX SYSTEM 200 EMA

Day Trading and Swing Trading the Currency Market: Technical and Fundamental Strategies to Profit from Market Moves (Wiley Trading)

I would like to give one simple and effective forex system for you who are new to forex trading.
The most used Moving Average is EMA 200. Here I give some basic idea about how to use the EMA 200 for your Trading purpose.

1. Set three difference time interval chart : 4 hours, 1 hour and 5 minutes chart.
2. Add the EMA 200 on those each chart. Color it as you like.
3.Identify a currency pair that goes against the 200 EMA on the smaller time frame, the 15 minute chart.

Using the EUR/USD pair as an example, check where price is relative to the 200 EMA on the 4 hour, 1 hour, and 15 minute charts.Price is what we call ‘bucking the trend’ if it is well above the 200 EMA on the 4 hour and 1 hour charts but below it on the 15 minute chart.So price is temporarily going against the overall trend and is in a retracement mode.

You now need to look for a good entry point to get into the market in line with the basic principle of buying the dips in an up trend while selling the rallies in a down trend.

You would look out for a distinctive candle that would indicate possible price exhaustion as it bucks the trend on the 15 minute chart. The probability is it would soon resume moving in the direction of the trend.This simple exercise only takes a few minutes and can be done a few times during the day.

For more simple forex system,please check other strategy in this blog. I posted a simple forex system using EMA and Slow stochastic  on previous post. Stay tune for other forex articles and strategies.

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