Moving Average Cross Trading Strategy

Moving Average Cross Forex trading strategy — is a simple system that is based on the cross of the two standard indicators — the fast EMA (exponential moving average) and the slow EMA. 

Features

• Very easy strategy to follow.
• Simple indicators used.
• It's easy to set stop-loss.
• Moving averages are laggy — can lag up to 10 bars.
• Ineffective during the flat markets.

Strategy Set-Up

1.      Any currency pair and timeframe should work.

2.      Add an exponential moving average to the chart, set its period to 9, apply to Close, set color to red (optional) — this is your fast moving average (FMA).

3.      Add another exponential moving average to the chart, set its period to 14, apply to Close, set color to blue (optional) — this is your slow moving average (SMA).

Entry Conditions

Enter Long position when FMA crosses SMA from below.
Enter Short position when FMA crosses SMA from above.

Exit Conditions

Stop-loss for Long positions should be set to the Low of the last candle before the cross occurred. For Short positions — to the High of the last candle before the cross.

Take-profit should depend on the stop-loss and should be not less that stop-loss. I recommend setting TP to 1.5 * SL or 2 * SL.

If another cross appears before the stop-loss or take-profit are triggered close the position.

As seen on the example chart, entry conditions are quite clear and with the proper TP/SL ratio, this strategy can be quite profitable.

Warning!

It's not recommended to use this strategy on the real account without testing it on demo first.