200 EMA with RSI as confirmation.
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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. #2
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    Moving average is an interesting indicator which I have seen many professionals use in the analysis of their trades in the forex market, the setting that each person chooses will now depend on the underlying principle that underscore his system, what matters more is the attitude and not necessarily the settings, if two people are seeking something, one will get it right and the other won't, that is how moving average are, I am happy that you wait for confirmation before entry.

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  3. #3
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    Quote Originally Posted by Leonvic View Post
    Moving average is an interesting indicator which I have seen many professionals use in the analysis of their trades in the forex market, the setting that each person chooses will now depend on the underlying principle that underscore his system, what matters more is the attitude and not necessarily the settings, if two people are seeking something, one will get it right and the other won't, that is how moving average are, I am happy that you wait for confirmation before entry.
    You are right, we cannot ignore how important the moving average is to our strategy as traders, but in as much as I use this indicator as part of the system that I trade with, I don't see it as fail safe, nothing is actually fail proof in this market, if we can stick to what we know with a good level of patience, nothing can stand on our way to the ladder that leads up to the success we seek. Yes, waiting for confirmation before I pull the trigger gives me more confidence that I am doing the right thing.

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  4. #4
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    Moving average is very important to use for determining certain factors that we should trade or not in the forex market, this can be very profitable when we consider trading it from the higher time frame, I prefer the daily though there are times in needed to switch down to the lower time frame to be sure about the trend or a present move before I intend to trade.

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  5. #5
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    The 200 moving average is gradually becoming the most popular indicator that most traders are depending upon to analyze the forex market and the implication of this is that traders are getting to know that the market trend is a very crucial one to know before trading and secondly, it means that a lot us us now ready to go on long term trading rather than depending on the short term trading that is not always reliable for the forex market.

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  6. #6
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    I got introduced to the 200 moving average by the person that taught me about this business, what he said was that people generally use it to determine the trend, when price is above then we are expected to buy into the pair, if we see price moving under it we should be waiting for a sell, it is used by many people because of its simple nature, maybe it is working for majority if not nobody will consider it as their trading strategy.

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  7. #7
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    Really, it's quite good to trade the moving averages, that is one of the best things that have ever happened to me as a trader, it changed the whole perspective I have about the market, I wait for your bounce off it, when I combine this with the rsi the results are usually outstanding, although sometimes I get heady and stubborn about the rules which leads me to make losses.

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  8. #8
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    Quote Originally Posted by Leonvic View Post
    I got introduced to the 200 moving average by the person that taught me about this business, what he said was that people generally use it to determine the trend, when price is above then we are expected to buy into the pair, if we see price moving under it we should be waiting for a sell, it is used by many people because of its simple nature, maybe it is working for majority if not nobody will consider it as their trading strategy.
    I did not have a good information about the 200 moving average until recently when I saw it being used by different people in forums, I just thought that if many people are actually using it with seriousness, it means there is something about it that I need to embrace and really since I started applying it to trades, I saw that there is a great difference between it and the conventional setting that I have always applied while trading it all along.

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  9. #9
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    trading with moving average 200 and rsi is a good and help the trader to find the good trading position and also can find the exit positions because rsi will help him to do that more than moving average 200 but moving average 200can be used for determination of the trend but may not be helpful for determination of entry and exit positions.

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  10. #10
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    The 200 EMA Multi-Timeframe Forex Trading Strategy is really simple and has the potential to give you hundreds of pips each month. You see, with the 200 EMA forex strategy, you are trading with the trend and buying low and selling high.The 200 EMA is one of the most popular indicators of all time with Forex traders the world over. The RSI is another indicator in the class of its own altogether.

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