Exponential Moving Average (EMA) is an indicator commonly used by traders, especially beginners.
EMA can be used to identify changes in market structure, especially on the higher time frames.
For this particular strategy, the 4 Hour chart and above is recommended.
The input levels are as follows: 26, 55, 100, 200.
This tutorial will demonstrate the use of EMA and when it could be applied during a trade execution.
Amateur traders will often use EMA crossovers as a BUY/SELL signal, remain disciplined and do not fall into this trap.
Always add multiple factors of confluence with risk management.
Exponential Moving Average (EMA) is an indicator commonly used by traders, especially beginners.
EMA can be used to identify changes in market structure, especially on the higher time frames.
For this particular strategy, the 4 Hour chart and above is recommended.
The input levels are as follows: 26, 55, 100, 200.
This tutorial will demonstrate the use of EMA and when it could be applied during a trade execution.
Amateur traders will often use EMA crossovers as a BUY/SELL signal, remain disciplined and do not fall into this trap.
Always add multiple factors of confluence with risk management.
Key Points of the Lesson
UTILITY
Simple strategy.
Prevents you from attempting to outsmart the market.
Helps maximize profits by following the trend.
IMPLEMENTATION
Activate EMA 26 (orange, 55 (yellow), 100 (blue and 200 (green) on Tradingview.
Wait for the crossover of the 55 and 26 EMAs and the subsequent “fanning out”
Works best on the 4h/daily timeframe.
PRACTICAL EXAMPLE
TIPS & TRICKS
Bullish uptrend ⇒ can buy the dip at the 55, 100 and 200 EMAs.
Invalidation/ stop loss below the 200 EMA.
Use confluence, check the market context.
Trend can continue even with divergences present.
Trail stop losses, wait for the crossover indicating a possible trend reversal.
Use market structure for stop loss placement.
TAKE HOME MESSAGE
EMA strategy is simple, requires patience.
Wait for 55 and 26 EMA crossover.
Use confluence to fine-tune entries and take profit levels, market structure for SL ⇒ trailing stop losses possible.