50 EMA Forex Strategy

50 EMA Forex Strategy

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If you are a Forex trader, and aspiring trader, but are having trouble making gains, you might want to try out the 50 EMA Forex strategy. This is a very simple Forex trading strategy for you to learn, master, and put to use. Sure, it might sound complicated, but in terms of overall difficulty, its one of the easier ones to master.

We know that you might be having trouble winning trades, and might even be losing a lot of money. However, if you master this 50 EMA Forex strategy, your odds of making money and winning trades should improve a whole lot.

Today, we want to go over this Forex strategy in detail, what it is, how it works, and more. We will also be providing you with some information on EMAs or exponential moving averages in general, just so you can understand the bigger picture of exactly what is going on here.

50 EMA Forex Strategy
Courtesy of https://www.forexmt4indicators.com/50-ema-forex-swing-trading-strategy/

The 50 EMA Forex Strategy

This is great strategy which can help day traders hold a position in the face of a coming drawdown. When a price nears an inflection point, it will often decide whether a trader suffers a loss or gains a profit. The common formula takes the average of the price at closing of the last 50 days and then divides by the total, which will give you the 50 day simple moving average.

Now, to take things to the next level, the 50 EMA Forex strategy, or the 50 day exponential moving average strategy, is the most popular variation. This offers traders with an EMA that is much more responsive to recent price changes.

The 50 EMA Forex strategy allows traders to cover the entire field, allowing them to find great mid term, and some longer term trading opportunities. It also offers traders a natural and easy counter swing for active trends, plus it acts as a good neutral ground when price action is being falsely interpreted by the majority of people.

50 EMA Forex Strategy
Courtesy of https://tradingstrategyguides.com/exponential-moving-average-strategy/

One Way To Use The 50 EMA Forex Strategy

Now, we want to provide you with a very simple way using this Forex strategy, whether for buy or sell positions. It’s actually quite easy.

Buy

  1. Place your 50 EMA line on your chart.
  2. Wait for the price of the asset to break the upside of the 50 EMA.
  3. The candlestick which breaks the EMA line, and closes above it, will be your entry.
  4. You should then place a buy stop order at 2 to 5 pips above the height of that candlestick.
  5. Here you are waiting for a breakout of the candlestick to trigger your buy stop order.
  6. You want to place the stop loss at 5 to 10 pips below the entry of this candlestick.
  7. You should then exit the trade when an opposite signal is given, or you can lock in your profits by using a trailing stop loss.

Sell

  1. Place your 50 EMA line on your chart.
  2. Wait for the price of the asset to break the downside of the 50 EMA.
  3. The candlestick which breaks the EMA line, and closes below it, will be your entry.
  4. You should then place a sell stop order at 2 to 5 pips below the height of that candlestick.
  5. You want to place the stop loss at 5 to 10 pips above the entry of this candlestick.
  6. You should then exit the trade when an opposite signal is given, or you can lock in your profits by using a trailing stop loss.

 

Pros & Cons of 50 EMA Forex Strategy

Of course, as is the case with all indicators and trading strategies, including this Forex strategy, there are both benefits and drawbacks. Let’s no go over the biggest pros and cons of using this particular exponential moving average trading method.

Pros of 50 EMA Forex Strategy

There are some really great aspects of this particular exponential moving averages strategy that are worth mentioning.

  • This is one of the easier FX trading strategies to learn, to master, and to put to use. Sure, you do still have to do some reading, and practice never hurts, but when it comes to strategies, it is one of the simpler ones.
  • In a trending market, the 50 EMA Forex strategy has great potential to provide you with many pips in profits, potentially hundreds of pips, especially when used in conjunction with longer timeframes, such as 1 hour charts, or longer.
  • This particular strategy works very well for traders to engage in price prediction, for position choice, and for strategy building too.

Cons of 50 EMA Forex Strategy

Of course, there are some drawbacks to this strategy that are worth mentioning too.

  • When it comes to a non-trending market, this is not a strategy you want to use. If the market is not trending, this method of trading will most likely provide you with many false signals.
  • Moving averages in general are lagging in nature, which means that prices move first and then the indicator responds, so sometimes data can be a bit old.

50 EMA Forex Strategy
courtesy of https://forextradingstrategies4u.com/50-ema-forex-trading-strategy/

50 EMA Forex Strategy – Final Thoughts

Moving averages and exponential moving averages are some of the first things which you should learn about if you are an aspiring Forex trader. This particular Forex strategy is one of the best out there, and it has many advantages, mainly in terms of providing you with a lot of pips when using it with a fairly long term chart.

Some of the other main benefits of this strategy include price prediction, position choice, and strategy building, all of which are super important in FX trading.

So, we have discovered this 50 EMA Forex strategy, and yes, it works quite well to put money in pockets. All of this said, it might still be a bit hard to understand, especially if you do not have a firm grasp on the basics of moving averages. If this is the case, we would definitely recommend joining our Income Mentor Box Day Trading Academy, because here you will learn everything you need to know about moving averages.

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