The 200EMA Strategy

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The 200EMA Strategy

Postby User » Tue Jul 07, 2009 7:43 pm

Forum transfer: Submitted by shawn on October 28, 2008 - 14:09.

HI
I found this strategy on the net and I was wondering if any one has seen it before better yet tried it before.
I have tried it for a few times and I have not lost yet "touch wood"

But I would like some expert traders opinions on this strategy.

Here it is:

Are you a relatively new trader looking for a solid forex strategy?

A challenge facing many new traders when developing their forex strategy is the ability to identify the overall trend for intra-day trading.

The 200 EMA (Exponential Moving Average) can solve the problem.

The 200 EMA is one of the most popular indicators of all time with Forex traders the world over, and for that reason alone is worth noting due to the psychological effect on the market place price can have when hovering around the 200 EMA.

Using The 200EMA Strategy

To use this very powerful Forex strategy, create charts on 3 time frames:

* 4 hour
* 1 hour
* 15 minute

Now plot a 200 EMA indicator on each chart and, as a suggestion, color it red, for easy visual impact.

Preferably tile the 3 windows containing your 3 charts into a vertical fashion so you can see the 3 time frames next to each other. It will squeeze up the information on the charts somewhat but for the purpose of this strategy that doesn't matter.

Now scroll through the various currency pairs you like to trade.

If you prefer to trade only pairs with a smaller pip spread, they amount to about 9.

They are:

* EUR/USD
* GBP/USD
* USD/CHF
* USD/JPY
* EUR/JPY
* USD/CAD
* AUD/USD
* NZD/USD
* EUR/CHF

What you are looking for is any currency pair that bucks the 200 EMA on the 15 minute chart.

So for example, look at the EUR/USD pair and note the position of price relative to the 200 EMA on the 3 time frames.

If price is well above the 200 EMA on the 4 hour chart, well above the 200 EMA on the 1 hour chart, but BELOW the 200 EMA on the 15 minute chart, price is bucking the trend.

The overall trend is up, price has temporarily gone against the trend and is currently in a retracement.

Using the fundamental trading principle of "buy the dips in an uptrend", "sell the rallies in a downtrend", look for a suitable entry point.

In the example given above you would look for an opportunity to buy the EUR/USD, perhaps watching for a candle signal that price has exhausted it's downward momentum, bucking the 15 minute chart 200 EMA and will soon resume it's upward momentum.

This is an easy exercise and it can be done once or twice a day, taking just a few minutes.

Watch For Price Bucking The Trend

Once you see price bucking the 200 EMA on the 15 minute chart, whereas it is on the opposite side on the 4 hour and 1 hour charts, sit up and take note. Watch carefully and grab the opportunity to get in and make some pips.

After a little practice you will see how extremely powerful this simple Forex strategy is - certainly deserving a place in your trading tool kit.

Please let me know what you think

Regards

Shawn
Attachments
200ema.png
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Re: The 200EMA Strategy

Postby User » Tue Jul 07, 2009 7:44 pm

Forum transfer: Submitted by Lino on November 1, 2008 - 18:17.

Hi Shaw,

I read something similar before, they use pivot points on the 15min chart to look for possible reversals. Havnt tried it yet but will sure have a look again.

Thanks you for sharing this strategy with us newbies.

Regards
Lino
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Re: The 200EMA Strategy

Postby User » Tue Jul 07, 2009 7:44 pm

Forum transfer: Submitted by Ik on November 2, 2008 - 09:32.

Hi Shawn,

Wow, i just check your strategy against a few charts, quite accurate. I wonder if it works only in trending Pairs? But now the questions is how to choose the timing for reversal.
I checked the internet, it is said that 200 EMA and 20 EMA is the most used EMA. So i did a check, 20 EMA is quite a strong Support/Resistant line for EUR/USD.

I am gonna add 20EMA (Entry point) and 50 EMA (Stop Loss) and try it next week. Excellent and Simple Strategy.

Thanks

Ik
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Re: The 200EMA Strategy

Postby User » Tue Jul 07, 2009 7:45 pm

Forum transfer: Submitted by Shawn on December 2, 2008 - 23:22.

Thanks for the feedback guys.

Just to let you know I have tried and tested this strategy lots of times over the last few months and: I HAVE NOT LOST YET!!!!

This makes me very exciting.
I do however have large drawdowns at times before the trade is complete because I don't even wait for the market to go high above the 200 ma like the strategy suggests I test the strategy to its fullest, when the shorter time frame only goes close to the 200ma I apply the strategy if you know what I mean.

It would be great if you guys can also test the strategy and let everybody know how what the results are.
The more people testing the strategy the better I have not found such a good strategy yet and I do a lot of research.

Let my know what you guys think

Regards

Shawn
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Re: The 200EMA Strategy

Postby User » Tue Jul 07, 2009 7:46 pm

Forum transfer: Submitted by ARINZE on March 8, 2009 - 02:51.

HI GUYS,I WANT TO BELIEVE THAT 'ENTRY' IS TRIGGERED WHEN PRICE CROSSOVER THE EMA 200 ON THE 15M CHART,PLEASE IF AM WRONG I SHOULD BE CORRECTED.HOW ABOUT THE EXIT AND STOP LOSS,NOTHING IS SAID ABOUT THEM.CAN SOME HELP? THIS STRATEGY LOOKS SIMPLE AND NICE THOUGH I AM YET TO DEMO TRADE IT;CHEERS, ARINZE NJGERIA
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Re: The 200EMA Strategy

Postby User » Tue Jul 07, 2009 7:47 pm

Forum transfer: Submitted by User on March 24, 2009 - 23:02.

Hi Arinze,

There is a purple vertical line on that screenshot, which represents about the same hour on every time frame.
As we can see, the price was well above 200 EMA on 4 hour TF and well above 200 EMA on 1 hour TF - both show uptrend. But if we look at 15 min chart, we can see that during the same hour the price sharply retraced down all the way to 200 EMA. That's where an alarm sounds in trader's head - it is a good opportunity to jump in on that retracement (to Buy the pair).

The strategy indeed doesn't advice on stops and exits. In this case, I'd suggest looking elsewhere for stop and exit methods and then simply combine them in one strategy.
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Re: The 200EMA Strategy

Postby DrGibo » Sat Aug 29, 2009 3:36 pm

Hi to all,

just added Stochastic (14,3,3) on the 15M chart to get signal for entry.
When Stoch comes out of the overbought/oversold area I think it's good time to enter the trade.


Happy trading

Greets Michael
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Re: The 200EMA Strategy

Postby snowhyte » Fri Sep 18, 2009 10:07 am

Hello all,

I am looking for a simple stategy to trade and I thought this 200EMA may be the right one.

Can anyone share with a few screen shot examples as I am still not too sure about this strategy.

Thanks
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Re: The 200EMA Strategy

Postby manus168 » Tue Sep 22, 2009 5:02 am

This is relative simmiliar with "Captain Currencies" : 3 DUCKS Trading System, He only use SMA 60 By Close at 4 hour, 60 Minutes, & 5 Minutes.


Kind Regards;

:lol:

Manus168
Yesterday = HISTORY !
Tomorrow = MYSTERY!
Today = GIFT !


Thats why we call it the PRESENT :)
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Re: The 200EMA Strategy

Postby manus168 » Tue Sep 22, 2009 5:07 am

Hi Shawn (User);

If im not wrong the entry is When EMA 200 By Close in H4 & H1 Up so we Enter the position at m15 when the price retrace down unto the EMA 200 By Close at m15, ist right buddy ?


kind Regards;


:)


Manus168
Yesterday = HISTORY !
Tomorrow = MYSTERY!
Today = GIFT !


Thats why we call it the PRESENT :)
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