Forex technical indicator for EMA Trading system
18 days period Exponential Moving Average Indicator
EMA Trading system is using combination between breakout method and Martingale method. The point of this system is to get small profit target. If you are trading in the Forex market you knew that the risk management is the most important factor. This EMA trading system is different with other EMA Trading systems, this EMA trading system has very unique strategy or method – you will find out letter. We can take profits in sideways and trending markets.
The simplicity of EMA trading system makes foreign exchange traders easy to use it, and you do not have to become an expert traders first to use and apply this EMA Exponential Moving Average trading system. And also, if you do not like stay in front of your trading platform for hours, you can use this EMA trading system properly.
Ok let's start it.
We use 4 hours trading chart to analyze our trading positions, after we have fixed analysis on 4 hours trading chart then we change into 1 hour trading chart time frame. And here are the trading rules for this trading system.
Buy trading signals
- the market price is above the Exponential moving average on 4 hours trading chart.
- the market price is bigger than mid price of the previous candlestick
Sell trading signals
- the market price is below the Exponential moving average on 4 hours trading chart
- the market price is lower than mid price of the previous candlestick.
Size setting for trading, profit target, and stop loss level
For this money management, we need excel file. Let's say we have buy trading signal at 1.9936 on 4 hours trading chart. Just after the candlestick closed this market price should be bigger than median price of the previous candlestick.
In excel file we make several columns or rows to calculate our trading. We calculate our profit target and stop loss level using excel form. For instance if we have 1.9936 for entry trading so we calculate our profit target at 1.9946 and 1,9931 for our stop loss level. But if the market price touched our stop loss level we change our trading direction and we open sell trading position using entry order at 1.9931. And our profit target would be at 1.9916 and stop loss level qould be at 1.9936 and so on. And we can aim big target with change our stop loss level if our trading position is in the same direction of the market trend.
You also can apply money management in lot calculation. For instance, if we use 10 lots for open trading and we got profits then you can close 5 lots or 50% of your trading lots. The rest of your open lots you can use them as follows :
- You can use 2 lot for trailing stop 10 points
- 2 trading lots for trailing stop 15 points and
- 1 trading lot for trailing stop 25 points
This trading management can give use good opportunities from losing trades and aim bigger profits if our trading position is in the same direction of the market trend.
You can close your trading position at the end of day trading or you can wait for the next trading signal.
On the image above we can see the first opening trade buy and sell.
We open trading when after the market price above the EMA indicator and the mid price of the previous candlestick. When candlestick opened at 1.9672 then we put this price into an excel worksheet. In calculation our profit target is at 1.9682. And to read our trading situation we can change our chart into 1 hour trading chart.
On the chart above, we opened a buy trading position at 1.9672. And then the market is moved bullish. After our trading touched the profit target we closed 50% of our trading positions. Just as we planned before. 20% trading position closed at 1.9682 and so on.
Our profit would be $ 1.320 using 10 lots trading.
Now we lat at the trading example, which the market is in the opposite direction with our trading positions.
On the above trading example, market price touched our stop loss level, and then we opened trade in the opposite direction from the first trading. In this new trading position we applied the same trading system rules. We set set new stop loss order 5 points and 10 pips for our profit target. And closed our 50% of our trading position after the market price touched our profit target and so on.
In this EMA trading system we can use the fibonacci lines to calculate the median price of the previous candlestick
So that's it, thanks for reading. And below are the custom indicators download links for you. You can use them for free.
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