Trend following strategy is very effective in trading market which brings high profit for the traders. This strategy is made based on trend following. 7 EMA and 17 EMA are used for this strategy to find signal. These 2 EMA crossover will give trend direction of the market price.
Required Indicator:
1. Exponential Moving Average 7
2. Exponential Moving Average 17
Buy Setup Rules:
✔Market price must be in strong uptrend
✔To identify uptrend, 7 EMA need to cross 17 EMA from lower to upper.
✔Price must stay above 7 EMA and 17 EMA.
✔Then wait for some retrace and pull-back from touching both EMA.
✔After touching both EMA, place buy stop order above candle.
✔Thus with every pull-back from both EMA, place pending buy stop order for each time.
Sell Setup Rules:
✔Market price must be in strong downtrend
✔To identify downtrend, 7 EMA need to cross 17 EMA from upper to lower.
✔Price must stay below 7 EMA and 17 EMA.
✔Then wait for some retrace and pull-back from touching both EMA.
✔After touching both EMA, place sell stop order below candle.
✔Thus with every pull-back from both EMA, place pending sell stop order for each time.
Example of Buy & Sell Setup:
In the above USDCHF H1 chart, buy and sell setup has been given with example. First you need to confirm downtrend to identify sell setup and vice-versa with buy setup. In the above example, after sell signal of this strategy, price fell more than 100 pips. On the buy setup, market moved more than 60 pips.
Time frame:
H1 & H4 is preferable. Can be used for scalping purpose.
Currency pairs:
Any trendy pair.
Take profit and stop loss:
Take profit should be set at least 40 pips. You can exit from the trade if market trend chage in opposite direction.
Stop loss will be below the candle for buy entry, above the candle for the sell entry.
Required Indicator:
1. Exponential Moving Average 7
2. Exponential Moving Average 17
Buy Setup Rules:
✔Market price must be in strong uptrend
✔To identify uptrend, 7 EMA need to cross 17 EMA from lower to upper.
✔Price must stay above 7 EMA and 17 EMA.
✔Then wait for some retrace and pull-back from touching both EMA.
✔After touching both EMA, place buy stop order above candle.
✔Thus with every pull-back from both EMA, place pending buy stop order for each time.
Sell Setup Rules:
✔Market price must be in strong downtrend
✔To identify downtrend, 7 EMA need to cross 17 EMA from upper to lower.
✔Price must stay below 7 EMA and 17 EMA.
✔Then wait for some retrace and pull-back from touching both EMA.
✔After touching both EMA, place sell stop order below candle.
✔Thus with every pull-back from both EMA, place pending sell stop order for each time.
Example of Buy & Sell Setup:
In the above USDCHF H1 chart, buy and sell setup has been given with example. First you need to confirm downtrend to identify sell setup and vice-versa with buy setup. In the above example, after sell signal of this strategy, price fell more than 100 pips. On the buy setup, market moved more than 60 pips.
Time frame:
H1 & H4 is preferable. Can be used for scalping purpose.
Currency pairs:
Any trendy pair.
Take profit and stop loss:
Take profit should be set at least 40 pips. You can exit from the trade if market trend chage in opposite direction.
Stop loss will be below the candle for buy entry, above the candle for the sell entry.
Attached Image (click to enlarge)
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