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Quad EMA

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408 views

Quad EMA

trading

Uploaded by

paolo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Quad EMA Strategy

by Admiral Markets Trading Camp


Contents

About the Author 3


Strategy Description 4
Exponential Moving Average 5
Awesome Oscillator 9
MACD Indicator 13
Conclusion 19

www.admiralmarkets.com © Admiral Markets 2013


About the Author

Nenad Kerkez is a full


time trader and dedicated
analyst, well known on
numerous websites for
Forex trading as
Tarantula. His Forex blog
thread has gained over
two million visits which
currently puts Nenad’s
thread on the top 3 most
visited topics. Nenad has
been a professional trader
for numerous years and
his simple strategies will
help you in establishing
your own trading career.

www.admiralmarkets.com © Admiral Markets 2013


Strategy Description

Currency Pair: EUR/USD

Time Frame: 5m

Indicators:
•  176-Period Exponential Moving Average of Close Price (red)
•  144-Period Exponential Moving Average of Close Price (blue)
•  44-Period Exponential Moving Average of Close Price (red)
•  36-Period Exponential Moving Average of Close Price (blue)
•  Awesome Oscillator
•  MACD 3, 7, 1

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Indicators Overview

Exponential Moving Average

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Exponential Moving Average

Crossover 50, 100 EMA


This crossover (50, 100 EMA) above gave a signal to buy, but traders need to
develop the patience , and not to jump into a trade just because of the crossover.

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Exponential Moving Average

Moving averages (50, 100 EMA) crossover showed a sell signal but
price retracted first

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Exponential Moving Average

Do you start noticing the pattern of Break OUT and REVERSE before
moving in a direction of a crossover? Great! Also keep in mind that sometimes
crossover happens directly on a breakout, which is the best signal for
a trade.

A few things to know in adjusting the MA:

• The smaller the N period numbers, for example 1, 3, 6 the more


movements on the chart, hence the more unreliable the signals are

• If you want to eliminate the noise, use bigger moving averages numbers
like 50, 100, 200 etc, since they give a complete picture of a trend without
any interruptions.

• A combination of smaller and bigger moving averages can give the


best outcome in trading.

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Indicators Overview

Awesome Oscillator

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Awesome Oscillator

This indicator was developed by the Bill Williams in his Chaos Trading System.

Awesome Oscillator is used as a technical analysis indicator for generating buying


or selling signals. It consists of a zero line and a green/red indicator on the chart.

Awesome Oscillator is calculated by default as subtracting the 34-period simple


moving average from the 5-period simple moving average.

Signal for entry is a bar above the zero (o) line. Every bar in histogram which is
bigger the a previous one is painted as green or every bar in histogram which
is smaller than previous one is painted red.

So if a bar is printed above the zero line we should look for a right moment to enter
the BUY position, and if the bar is printed below the zero line Trader should look
for a SELL position. The immediate break above and below the zero line doesn't
mean that we need to enter the position immediately. This is a very good filter for
any system, and should be used as one of the methods of confirmation.
www.admiralmarkets.com © Admiral Markets 2013
Awesome Oscillator

Example for a Buy position

Price went from above the zero line, crossed it and started to build a
momentum for a Buy position.
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Awesome Oscillator

Example for a Sell Position

Breaking the Zero line on histogram give a signal to the trader to look for
a SELL.

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Indicators Overview

MACD Indicator

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MACD Indicator

MACD (Moving Average Convergence Divergence) indicator is one of the


most commonly used indicators in Forex trading. MACD was developed in
the 1970s by Gerald Appel as an oscillator that graphically displays
moving averages in relation to price.

MACD falls into the same family as RSI, CCI and Stochastics, but this
indicator can be used to assist traders with finding market momentum,
direction, and entries by understanding the MACD line, the signal line, zero
line and histogram. Before the MACD can become useful to us as traders,
we first need to better understand its components.

The MACD Line is displayed in blue in the indicator below and is built by
comparing a 12 period EMA (Estimated Moving Average) to a 26 period
EMA.

www.admiralmarkets.com © Admiral Markets 2013


MACD Indicator

By comparing moving averages of different durations we can change shifts


in trend as it oscillates up and down. Our signal line is comprised of a 9
period EMA of MACD.
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Quad EMA Strategy

Entry Position

Before we take a buy trade the two above criteria must be met. The 144
EMA must be above the 176 EMA and the 36 EMA must be above the 44
EMA. We then wait for AO to fall below the 0. The final „trigger‟ to the
entry is when the MACD closes above the 0 line.

Sell trade is vice versa. 36 EMA must be below 44 EMA and 144
EMA must be below 176 EMA.

TAKE PROFIT and STOP LOSS

10-40 pips. I advise Pivot Point targets.

STOP LOSS above/below last highest high

www.admiralmarkets.com © Admiral Markets 2013


Quad EMA Strategy

Buy example

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Quad EMA Strategy

Sell example

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Quad EMA Strategy

Rating

4.00/5.00

Conclusion
This is a very good system especially for new traders. The system
uses both AO and MACD and this combination gives good results on
EUR/ USD. Other pairs and timeframes should be tested too.

www.admiralmarkets.com © Admiral Markets 2013


© Admiral Markets 2013
www.admiralmarkets.com
[email protected]

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