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Thread: 200 EMA with RSI as confirmation.

  1. #1
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    200 EMA with RSI as confirmation.

    This strategy is very simple, it requires patience because it is based on the 4 hour time frame
    Before I go into how the system works, here are the settings:

    Moving Average
    Period: 200
    MA method: Exponential
    Apply to: Close

    Relative Strength Index
    Period : 10
    Apply to : Median Price (HL/2)
    Level : 50

    Time Frame USED 15 mins to 4hr

    RULES FOR BUYING
    When price breaks and closes above 200 EMA wait for RSI to touch or cross 50 below and form a V shape, as soon as the V is completed, enter buy at the open of the next candle.

    Stop Loss:
    Previous Swing Low

    RULES FOR SELLING
    When price breaks and closes below 200 EMA wait for RSI to touch or cross above 50 and form an inverted V shape, as soon as the inverted V is completed, enter sell at the open of the next candle

    Stop Loss:
    Previous Swing High

    Risk Reward: 1-1 Minimum
    Below is a chart of eur usd, notice that the V shape that happens after price crossed above the line 50, but I will not buy until price has closed above the 200 EMA as an extra confirmation because I don't want a false buying signal.


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  2. #101
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    There is a number of accuracy to derived from the use of 200 EMA indicators in the market. Traders that understand the use of 200 EMA indicators are less stressful in trading the market with the help of this indicator while traders that have no good experience about this indicator struggle at all times and at the end still get huge losses in the market.

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  3. #102
    Trader musiliu's Avatar
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    it takes a lot of time before price could touch the EMA 200, it is a slow moving average. I prefer using EMA 100, I think it is perfect for my trading due to the fact that 100 is a round number. I normally wait for the price to touch the EMA 100 and will trade only if the price shows a sign of continuing the major trend.

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    Always have realistic DREAMS!

  4. #103
    Trader Batavia's Avatar
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    it's need a patience to wait the price will touching that MA 200 if you rely on this as a signal , but i think the another function of MA 200 is as indication of the trend then if the price is still below of the price its mean trend is still down. in your chart the line like that is suit for strategy breakout when the price pass the line its a sign to buy.

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  5. #104
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    Quote Originally Posted by musiliu View Post
    it takes a lot of time before price could touch the EMA 200, it is a slow moving average. I prefer using EMA 100, I think it is perfect for my trading due to the fact that 100 is a round number. I normally wait for the price to touch the EMA 100 and will trade only if the price shows a sign of continuing the major trend.
    Sure, it takes a long time to come to the 200 EMA but when you see the reaction away from the that moving average, you will realise that the wait is worth it, I have not tried the 100 moving average, I don't see my 200 moving average as slow, the patient dog it is said eats the fattest bone, why should I be struggling to get crumbs when I can eat from the table with being patient, like I have previously mentioned, the 200 EMA is very potent even from the five minutes upwards, I have sometimes tried it on one minute and it still works fine.

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  6. #105
    Trader famousfx's Avatar
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    Moving averages is a good strategy in the Forex market, Moving averages are of various values or period as trader want it, some traders like to be making use of lower values or period, for instance we have higher period moving averages commonly use such as MA200, MA100,MA50, and the lower values such as MA 14,MA13,or MA20, the use of all of them is by practicing well with them to know how they react with price and the action to perform with them, now in this strategy that still combine with another indicator it is added advantage to make best use of the strategy profitably if we practice and test them well.Thanks for sharing.

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  7. #106
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    RSI is a good indicator as far as i know because of the important role it plays here in the market with the overbought and oversold market situation.The 200 SMA is another wonderful indicator too that is good in getting the long term direction of the market.The RSI is a very good confirmation indicator because if we d not know the extent of the market been overbought or over sold, then making a wrong trade is imminent.

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  8. #107
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    Simple , but very wonderful combination of good trading factors. The RSI is a very good indicator that is often used for the overbought and the oversold purpose of the market and this can lead to the determining the reversal of the trend when the market is either oversold or overbought.I love the 200 EMA very much because it till this day remain the only indicator that do not fail when you are looking for the trend of the market on the long term.

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  9. #108
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    simisola, if price takes a long time to come to the 200 moving average, I think the Forex trader must develop the patience to wait for the right moment, that would afford him the opportunity to earn well from the indicator, if we rush into a trade that has not fully matured, we might regret this action because of the losses we will face, many people trade the 200 moving average, there must be something special about it.

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  10. #109
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    Quote Originally Posted by Leonvic View Post
    simisola, if price takes a long time to come to the 200 moving average, I think the Forex trader must develop the patience to wait for the right moment, that would afford him the opportunity to earn well from the indicator, if we rush into a trade that has not fully matured, we might regret this action because of the losses we will face, many people trade the 200 moving average, there must be something special about it.
    Patience is the best policy that can be deployed before any one can become a successful trader, we need it either when we are trading the 200 moving average person any other strategy that we find to be convenient and profitable, success would never be achieved in the absence of patience, waiting for the right kill zone is the best way we can secure good profitability with this strategy.

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  11. #110
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    moving averages with the combination of RSI indicator is a good combination to gain profitable trade because it can help you to find the good trading position and also can find the enter and exit positions, rsi indicator will help you to do strong analysis, if we can follow 200 ema it means that you need to wait for a long time as market can reach at this position.

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