Moving average crossovers are a popular method of approaching a trading strategy. The short term moving averages crossing over indicates the short term trend has changed and we want to trade in the direction of the cross. If the 5 is above the 8, we will look for long trade entries. If the the 5 ema is below the 8 ema, we will look for short trades. Keep in mind this is a short term swing trading strategy so keep your profit expectations in check. Wait for 5 ema to cross 8 ema to the upside.
You can buy stop the high of the candle that turned the moving averages or simply enter at close. Set your stop 5 pips above or below the entry candlestick. If that entry candlestick is a narrow range candlestick, use the previous candlestick. As you can see, the 5 ema and 8 ema crossover trading strategy is pretty straight forward. As you gain experience, you will tend to use other tactical trading plays or trading strategies breakouts, pullbacks to enter the trend if you missed the actual crossover trade trigger.
Mail will not be published required. Any Long Entry Rules: You can use a couple of options for take profit Look to the nearest chart structure Use a cross of the moving averages Use a reversal chart pattern to signal your trading exit. I am using the conservative entry of setting a sell stop below the low of the setup candlestick.
If you used the moving average crossover as an exit and exiting at the close, this short trade banked pips or a 1. Using a resistance structure see 1 , this trade banked pips 2. Using the crossover at 3, the pips total pips. Triggered long but trade appears to be in danger of taking a close upon the cross of the moving averages As you can see, the 5 ema and 8 ema crossover trading strategy is pretty straight forward. That means for a short trade, move stop loss and place above the high the candlestick that continues to make lower highs.
For a long trade, move stop loss and below the low of each subsequent candlestick that continues to make Higher Lows. Or if on the daily time frame, you may try to use a pips trailing stop. If on the 4 hr time frame, use pips trailing stop. Use an ATR trailing stop Use trading stop placement tips from this article. Posted in Basic Swing Strategies. Leave a Reply Click here to cancel reply. Powered by WordPress Designed by:More...