200 EMA With Awesome Oscillator Forex Trading Strategy

The  200 EMA With Awesome Oscillator Forex Trading Strategy is a very simple trend trading system and therefore in a strong trending market, it has the potential to be really profitable.

In here, you will learn the trading rules on how to use trade teh 200 exponential moving average with the Awesome Oscillator Indicator.

What timeframes are required for this: 1 hour and upwards

What currency pairs you can trade this system? Any

Forex Indicator needed: 200 ema and Awesome Oscillator (default settings).

 

BUYING RULES

1. Price must be (a)travelling above the 200 ema and head back down to touch the 200 ema or (b) crossed up from below the 200 ema and there’s a bullish candlestick closed above the 200 ema.
2. The Awesome Oscillator must (a) have a green bar or (b) must be above the 0.00 level.
3. The buy signal must be a bullish candlestick that forms after touching the 200 ema and bounced up or crossed from below the 200 ema and closed above the 200 ema line.
4. Place a buy stop order 2 pips above the high of that bullish candlestick (if spread is huge, increase this to between 3-5)
5. Place your stop loss 2 pips below the low of the nearest swing low, which ideally should be the bottom of the candlestick that touched the 200 ema and bounced back up from or 2 pips below the low of that bullish candlestick where you placed the pending buy stop order if that stop loss is not too close to get you stopped our prematurely
6. For take profit target price level, aim for the previous swing high point or you can use a risk:reward of 1:2 or more

SELLING RULES

1. Price must be (a)travelling below the 200 ema and head up  to touch the 200 ema or (b) crossed down from above the 200 ema line and there’s a bearish candlestick closing above the 200 ema.
2. The Awesome Oscillator must (a) have a red bar or (b) must be below the 0.00 level.
3. The sell signal must be a bearish candlestick  (a) that forms after touching the 200 ema and bouncing back down or (b)crossed from above the 200 ema and closed below the 200 ema line.
4. Place a sell stop order 2 pips above the high of that bearish candlestick (if the  spread is huge, increase this to between 3-5 pips)
5. Place your stop loss 2 pips above the high of the nearest swing high, which ideally should be the top of the candlestick that touched the 200 ema where it  bounced back down from or 2 pips above the low of  that bearish candlestick where you place the pending sell stop order if that stop loss is not too close to get you stopped our prematurely
6. For take profit target price level, aim for the previous swing low point or you can use a risk:reward of 1:2 or more

DISADVANTAGES OF THE  200 EMA With Awesome Oscillator Forex Trading Strategy

1. in a ranging market, you will get false signals.
2. if you have price crossing from up to down and closing below the 200 ema line, the risk is that price may do  minor reversal (head back up) and take out your stop loss order.
3. price goes before lagging indicators, therefore your trade entries are taken after price has moved some distance already.

ADVANTAGES OF THE  200 EMA With Awesome Oscillator Forex Trading Strategy

1. the use of 200 ema in this forex system smooths out the lot market noise
2. simple, easy to understand and execute, even your 6 year old can do this, I believe.
3. it is a really good swing trading system
4. the risk:reward ratio of this trading system are great as you can see from the charts above if you target previous swing lows or swing highs as your take profit target levels.
5. you can use tight stop loss trading technique with this system especially when price touches the 200 ema and bounces up or down.
6. the use of reversal candlestick can enhance your trade entry so head over to this post and read this top 10 reversal candlestick patterns every forex traders should know.

 

Enjoyed this? Why not share by clicking those sharing buttons below. Thanks