For traders looking for a trend following strategy, there is nothing better and simpler than using the moving average. One of the commonly used indicator, the moving averages form the basis for many different trend following strategies. In this trading strategy, we make use of the and 50 periods exponential moving average applied to the 4-hour charts.
This strategy does not rely on the moving average cross over but rather enters the trend after it is established and exits on a quick profit. This forms the main basis of our bias. Because the H4 chart interval closely follows the daily charts, trends are well reflected in this time frame. This moving average will be the key towards managing risks in our trade.
If either of the conditions is met, we then wait for the following set up to appear:. The chart below illustrates how the sell trade set up is identified.
The advantage of using this trading strategy can be summarized into the following:. John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets.
John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics. Will the impact of the news slow down or even reverse the trend?
Thank you very much for your expertise! News will certainly impact relevant currency pairs and dependant on the release can either disrupt or advance the trend. Thank you very much for the prompt reply. I find your article very useful. The explanation given to my question was well answered. Hope I set up correctly. Hello James, I find this article exactly what I wanted and the strategy suits me perfectly. Trading with the and 50 EMA: H4 Time frame Trading Strategy.
Hi Jason, News will certainly impact relevant currency pairs and dependant on the release can either disrupt or advance the trend. Similarly, if we have strong US data this again will likely speed up the trend as it will weigh on EURUSD To remain safe, look to only take news based trades where they align with the trend. Hi James, Thank you very much for the prompt reply. Hi Jason, Glad you found my answer helpful. Hope your trade worked out for you. All the best, James.
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