Everyone has a trading strategy, at least should have, no matter if it is a scalping or a long term we, as traders, always need to stick to that saying: plan your trade, trade your plan. So here is one of the strategies that I have been using in my forex endeavour. I call it: EMA touch and go.
It is pretty basic and works based on the touch of the 5 EMA on a hourly chart and it is most effective in trending pairs, since it is a “follow the trend” strategy.
You will need the following tools to put it into work:
- Hourly chart of a trending pair (no matter the direction)
- 5 EMA (red line in my charts)
- 8 EMA (blue line in my charts)
- 21 EMA (green line in my charts)
So, what’s the plan?
If the pair is trending up and the price action is above the 21 EMA, we will wait for a touch or a close near the hourly 5 EMA to enter a buy position, as shown by the black arrows in the chart below:
The same plan can be applied to the down side: if the pair is trending down and price action is below the 21 EMA, we will wait for a touch or a close near the 5 EMA to enter a sell position, as shown by the black arrows in the chart below: