Trading systems based on fast moving averages are quite easy to follow. Let's take a look at this simple system.Currency pairs: ANYTime frame chart: 1 hour or 15 minute chart.Indicators: 10 EMA, 25 EMA, 50 EMA.
Entry rules: When 10 EMA goes through 25 EMA and continues through 50 EMA, BUY/SELL in the direction of 10 EMA once it clearly makes it through 50 EMA. (Just wait for the current price bar to close on the opposite site of 50 EMA. This waiting helps to avoid false signals).
Exit rules: option1: exit when 10 EMA crosses 25 EMA again.option2: exit when 10 EMA returns and touches 50 EMA (again it is suggested to wait until the current price bar after so called “touch” has been closed on the opposite side of 50 EMA).
Entry rules: When 10 EMA goes through 25 EMA and continues through 50 EMA, BUY/SELL in the direction of 10 EMA once it clearly makes it through 50 EMA. (Just wait for the current price bar to close on the opposite site of 50 EMA. This waiting helps to avoid false signals).
Exit rules: option1: exit when 10 EMA crosses 25 EMA again.option2: exit when 10 EMA returns and touches 50 EMA (again it is suggested to wait until the current price bar after so called “touch” has been closed on the opposite side of 50 EMA).
Advantages: it is easy to use, and it gives very good results when the market is trending, during big price break-outs and big price moves.
