Using the 34 EMA as part of a breakout trading strategy might point you to the market's trend. When used in conjunction with trend lines, it may also enable you to place trades against the trend for rapid scalping chances.
When you trade against the 34 EMA, you are trading against the longer term trend direction, therefore make sure you carefully control your trade so you do not get caught in the incorrect way.
Required Indicator
EMA (exponential moving average) of 34 periods
Technical Analysis Software
Consistent ability to draw trend lines
You may utilize the 34 EMA scalping strategy as a swing trading strategy as well, but for the sake of this post, we will be using a lower time period. Of course, you may scalp for longer time periods since scalping just means capturing rapid gains as they become available.
Also Read: Top Scalping Strategy In Forex Trading
Time Frames to Consider When Scalping
1 minute
5 minutes
15 minutes
Scalping Currency Pairs
We want to make sure we are scalping Forex pairs with strong movements. Slower moving currency pairings will work since they also experience momentum changes; nevertheless, we will stay with the more heavily traded pairs.
EURUSD \GBPUSD
EURJPY \GBPJPY
Of course, you may experiment with other pairings, but make sure that any pair you select has a good ATR – average true range – throughout your trading session.
Scalping Setup - Buying Rules
The 34 EMA indicates that the market is in a downward trend.
Price breaks over a declining trend line
The price rises above the 34-day moving average.
Look for a strong bullish candlestick pattern or chart pattern, such as a horizontal channel.
 |
| 34 EMA scalping |
Let us have a look at this chart to see how it pans out.
On this five-minute chart, the 34 EMA indicates that we are in a downward trend.
Price is contained inside the trend line (inner trend line) till.....
Price breaks above the trend line, slightly above the 34-day moving average, and then breaks higher.
Profit Objectives and Stop Losses
You may use the low of the 34 EMA breakout candlesticks as a stop loss and risk multiples as a profit target. You may also target a take profit target based on recent pivot highs.
Whatever you do, make sure your strategy is consistent and that you employ a rule-based trading plan so that your efforts are repeated on every single transaction.
Also Read: The Top 5 Forex Trading Techniques
Scalping Rules for Sell Setup
Look for the 34 EMA to show that we are in an uptrend.
The price falls below an upwardly sloping trend line.
Price falls below the 34-day moving average (EMA).
Look for a bearish candlestick pattern or a chart pattern like a horizontal channel.
I intended to show a less-than-ideal scalping position, and in this case, price pulls back over the 34 EMA immediately after breaking down.
The 34 EMA slope indicates that we are in an upswing.
Inner trend lines (demand lines) are typically preferable to extreme pivots.
Price has first broken the EMA, and after a short stabilization phase (which is sometimes a decent entry point), price has pushed below the trend line.
Excellent example of price estimates based on past movements.
I would also want to point your attention to the blue box on the left.
Inner trend lines often indicate probable backside reversals, and in this situation, you may utilize a basic trend line trading strategy to enter the trade.
Scalping Strategy Using 34 EMA and Trend Lines That Is Simple and Repetitive
Consistency is the cornerstone to every trading strategy. Make sure you write down your trading guidelines and draw your trend lines consistently.
In addition, below are a few additional important factors to consider while developing your scalping strategy (or any trading strategy)
Where are you going to exit your transaction, profitably or not?
What candlestick or candlestick pattern are you going to employ to enter your trade?
How much will you risk every transaction in order to sustain the losses from losing trades?
No comments:
Post a Comment