3 EMAS Trading System For MT4
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 3 EMAS Trading System For MT4 has the potential to identify quality trade signals in the 15 minute and higher time frame. The functions of this system are closely related to market momentum and shift short-term retracement phase.
The momentum of the market is measured with the help of the EMA. The slope of the EMA tells us about the intensity of the buying and selling pressure. Since EMA are very reactive to recent price movement, the inventor of this strategy suggests trading the major pairs only. However, experienced traders can use this system to trade minor currency pairs but they must test this system in the demo account.
The 3 EMAS Trading System For MT4
Before we dive into the details of this strategy, let's see the key indicators used in this system.
- Exponential Moving Average (EMA) 3
- EMA 13
- EMA 144
After placing the necessary indicator, let's have a look at the chart:
Why we need 3 EMAs with different periods?
It is always better to set different period EMAs while identifying the trend in the lower time frame.
EMA or Exponential Moving Average is different from the traditional Simple Moving Average. The standard Simple Moving Average focuses on the average prices for the exact number of candles whereas the EMA focuses on the most recent prices. So, with the help of three different periods of EMA, we can smoothen the noise in the price.
In this system, EMA 144 will be acting as the main trend identifier tool.
If you are trading in a 1-hour timeframe and the price is trading above the EMA 144, it means the buyers are controlling the price. In that case, we will be using this system only to identify the buying signals in the major currency pairs.
To improve the accuracy of the trade, we will be using the 3 and 13 EMA.
The direction of three different EMAs should be the same in order to consider the trade signal as a valid trade setup.
3 EMAS Trading System For MT4 - Bullish Trade Setup
We have already stated, we need to look for the trade signals in the major currency pairs. But if you wish to trade the minor currency pairs, you should sync yourself with this system by using the strategy in the practice trading account. Now let us see the key steps for finding the trade signals.
Bullish Trade Condition
- Price should be trading above EMA 3, 13 and 144
- EMA 3 should cross above EMA 13.
- The price should close above the EMA 13 and it must have a bullish closing.
Entry
After checking the three important conditions, you can open the long trade. If any single condition is not filled, you should ignore the trade signals regardless of your intuitions.
Stop Loss
It is better to use the most recent swing low to set the stop loss.
If the trade is taken in the H1 or higher time frame, we should be careful about the stop loss points. If the stop loss points exceed 40 pips, it is better to ignore the trade signals.
Take Profit
If the 3 EMA crosses below the 13 EMA, we can close the long trade. In case, you want to set predefined take profit, you can analyze the resistance level and set the take profit in such a way so that the risk to reward ratio is better than 1:2.
3 EMAS Trading System For MT4 - Bearish Trade Setup
Now let's come to the bearish trade setup. The process is fairly simple and we need to check 3 conditions.
Bearish Trade Condition
- Price should be trading below EMA 3, 13 and 144
- EMA 3 should cross below EMA 13.
- Right below the EMA 13, we need a bearish candle.
Entry
If the market condition fulfills the above-mentioned 3 conditions, we can take our short trade. But we should be careful about the risk factor. It is better not to take any trade by risking more than 2% of our account balance.
Stop Loss
It is better to use the most recent swing high to set the stop loss.
If the trade is taken in the H1 or higher time frame, we should be careful about the stop loss points. If the stop loss points exceed 40 pips, it is better to ignore the trade signals.
Take Profit
We have to wait for the bearish cross in the 13 and 3 EMA to close the trade manually. On the other hand, we can also determine the nearest resistance level to set the predefined take profit. But the minimum risk to reward ratio must be 1:2.
Managing the trades
You might use the system in a very logical way still you might have to suffer from this system. Unless you have strong trade management skills, things will be hard in the trading business. Follow the below-mentioned rules to manage your trades while using this strategy.
- Always use stop loss and take profit in a trade.
- Don't panic if two or three consecutive trades hit stop-loss price.
- Move your stop loss at breakeven as soon as the price breaks above or below the recent low or high.
- Try to trade in the higher time frames as it provides better signals.
- Trade without having any emotional attachments.
- Be confident and have faith in your trading system.
Conclusion
By now, you must have realized the 3 EMAS Trading System For MT4 is greatly depends on the market momentum. So, try to find the trade signals during the stable hours. Looking for the potential trade signals during the volatile period of the market will increase the risk factor. As a trader, your prime concern should be the safety of your trading capital. So, try to use this trading method in a conservative method. And use this system to trade the demo account as long as you want. But make yourself comfortable with this strategy in the practice trading account before you start trading with real money.
Please note: Before you trade this strategy with real money, we advocate to learn the system on a demo account first. Every new system/strategy has a learning curve and mistakes can be easily made. So it is better to risk paper money than real money at the beginning.
Download the complete system description and the files here:
Partially Automated Trading Besides Your Day Job
Alerts In Real-Time When Divergences Occur
