5 EMA exponetial moving average scalping system For MT4
Table Of Contents:
- 5 EMA exponetial moving average scalping system For MT4
- The 5 EMA scalping system for forex – Long positions
- The 5 EMA scalping system for forex – Short positions
- Is the 5 EMA scalping system for forex good for you?
Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.
The 5 EMA exponetial moving average scalping system For MT4 , as the name suggests is an exponential moving average based trading system. This trading system is an all round trading strategy that drives the trading signals from the moving averages that are used.
As a result, the 5 EMA scalping system for forex is basically a trend following strategy. While we use this trading system on a 15 minute chart, traders can easily make use of this trading system on any chart time frame of their choice. Also, given the use of the indicators in this method of trading, you can apply this system to different markets of your choice.
If you have been trading with moving averages or traded any kind of a trend following strategy, it will be easy to get accustomed to this trading system. In the 5 EMA scalping system for forex, we have the two moving averages on the price chart. The exponential moving averages are based on the setting of 5 period, one set to close and the other set to open. The concept behind using two moving averages but with open and close is unique. In this method, you are able to get the bullish or bearish signals when you see that the average closing price is consistently above the opening price or vice versa. The signals generated from such a combination of moving averages is more responsive and you are able to capture the trends a lot more easily.
In the first sub window of the 5 EMA scalping system for forex, we have the MACD indicator. This is the default MT4 MACD indicator, which comprises of the histogram and the MACD line. If you wish, you could replace this indicator with a more accurate version of the MACD indicator that is freely available for download. You can just search for it and find the MACD indicator for MT4 easily.
In the second sub window of the 5 EMA scalping system for forex, we have the stochastics oscillator. The settings used for the Stochastic oscillator is a 14, 3, 3 setting using the high and low prices while using a simple moving average method for calculation. When you combine all the three indicators, buy and sell trading signals are generated for you. As you can see, this is nothing but a very nicely designed trend following system.
But as with any trend following strategy, the signals generated from the system can be prone to losses when there is on trend. Typically, it is said that trends make up just 20% of the price action. For the remainder of the time, prices actually tend to consolidate. But given the fact that you can use the 5 EMA scalping system for forex across any chart time frame, you can capture the relevant chart time frame's trend and trade based off it.
Let's now take a look at how you can trade using the 5 EMA scalping system for forex.
The 5 EMA scalping system for forex – Long positions
For long positions in the 5 EMA scalping system for forex, start with the moving averages. We need to see both the moving averages making a bullish crossover, indicating that the market is moving higher. Then look to the MACD indicator next.
We need to the see the MACD also cutting across the histogram line and indicating a bullish momentum. Finally, look to the stochastics oscillator which should also signal a bullish market. Note that not all three indicators signal a bullish market straight away. So allow for some flexibility here.
When the conditions are met, take a long position on the start of a new candlestick with the stop loss set to the recent swing low. You can either use a fixed risk reward set up or trail your stops a few pips below the recent candlestick’s lows until you get stopped out.
The 5 EMA scalping system for forex – Short positions
For short positions in the 5 EMA scalping system for forex, start with the moving averages. We need to see both the moving averages making a bearish crossover, indicating that the market is moving lower. Then look to the MACD indicator next.
We need to the see the MACD also cutting across the histogram line and indicating a bearish momentum. Finally, look to the stochastics oscillator which should also signal a bearish market. Note that not all three indicators signal a bearish market straight away. So, allow for some flexibility here.
When the conditions are met, take a short position on the start of a new candlestick with the stop loss set to the recent swing high. You can either use a fixed risk reward set up or trail your stops a few pips above the recent candlestick’s highs until you get stopped out.
Is the 5 EMA scalping system for forex good for you?
In conclusion, we find that the 5 EMA scalping system for forex is a very nice trading strategy. We especially recommend this trading system for beginners or for those who want to understand how to trade with the trend.
All the indicators in this trading system make use of the default indicators that come with the MT4 trading platform. As a result, the template used in the 5 EMA scalping system for forex strategy is lightweight and you can use this template across multiple instruments and even chart time frames. But for starters, we recommend that you use this trading system on not more than two instruments at one point, until you become more adept at understanding on how this strategy works.
Another point to note in the 5 EMA scalping system for forex is that you need to be patient for the signals to work. In many cases, the signals do not come that easily. And the signals that come need to be filtered. Therefore, if you are impatient, chances are that you might end up losing money especially when the markets are ranging. Overall, the 5 EMA scalping system for forex is a highly recommended forex trading system that you can use straight away.
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