- 3 EMA Crossover Trading Strategy For Any Market
- Price over all three averages is a strong confluence showing both an uptrend and rising momentum in all three time frames.
- Method 1 - Triple moving average trading strategy
Last updated Nov 23, Reading Time: 4 minutes 0 6, Share A triple moving average trading strategy is well known and fairly common. It is a simple trend following strategy that is determined based on the moving averages that are being used. As for values, the general combinations are, 50 or50, 20 or 10 depending on the timeframe.
Of course, there is no specific rule on the values periods of the moving average, and it is up to the trader to decide what values to use. Understanding the triple moving average system A triple moving average trading system is based off buying the dips in an uptrend or selling the rallies in a downtrend.
The above rules are very simple to understand and as for the stop loss and take profit levels, it is up to the trader to decide how they want to place their levels. It could be a trailing stop or a fixed RR set up.
Moving Average Strategies for Forex Trading
But here are some unique ways you can pick up on potential buy and sell signals. However, this is not a signal to immediately enter the trade.
Look to the chart below which illustrates a false sell signal and a perfect buy signal. Go for aand RR set ups and move your stop losses accordingly.
- Simple Moving Averages Make Trends Stand Out
- The moving average is easy to calculate and, once plotted on a chart, is a powerful visual trend-spotting tool.
- Moving Average Trading Strategies
The reasoning behind this sell set up is due to the nature of the slope of the 50 and EMA. In this example however, the trade would have reached T1, T2 but T3 would have been stopped out near T1. Still, the set up offered a very good RR.
3 Profitable 200 Moving Average Strategies (start trading these today...)
Not three indicators moving arage strategy set ups are created equally The trick in trading this method is to allow yourself enough chart time to be familiar for this pattern to play out. Not all set ups work out exactly the way as defined.
3 EMA Crossover Trading
The first chart below shows an example. Of course you could have entered long on the breakout from the first level, or you could have waited for the second retracement. Regardless of the trade entry, notice both the trades moved in your favor.
Flexibility in trading this method And in some instances, the trade is not triggered at all.
Moving Average Trading Strategies
The next chart below shows a short signal that quickly reached up to T3 while the long signal did not trigger the set up. Why does this set up work?
Most investors will look for a cross above or below this average to represent if the stock is in a bullish or bearish trend. Even hardcore fundamental guys will have a thing or two to say about the indicator. Below is a play-by-play for using a moving average on an intraday chart. In the below example, we will cover staying on the right side of the trend after placing a long trade. Simple Moving Average Example Notice how the stock had a breakout on the open and closed near the high of the candlestick.
If you have asked yourself this question, chances are that you are thinking on the right track. This trade set up work because of momentum.
Simple Moving Averages Make Trends Stand Out
Thus, based on the dips or rallies that occur later, three indicators moving arage strategy trade can be entered safely in the direction of the momentum. In the next article we will explore another way to trade the Triple EMA trading strategy.
Until then…. Practice, practice, practice!