After this low is broken, wait until a new low is created and prices begin to retrace once more.Mark the low point prior to retracement using the horizontal line tool.Within the 200 and 50 EMA, prices must first establish a low before retracing to reach a high.Prices must be trading at 50 EMA or lower.The sell signal must meet the following criteria: Signals to Buy and Sell Based on the 50 and 200 EMA When the 50 EMA has just crossed over the 200 EMA, the market is likely to move in favor of the bulls, and we should look to buy.įollowing the trend identification, we have to wait for the buy or sell signal to show up.When the 50 EMA has just crossed below the 200 EMA, the market tends to go bearish, and we should look to sell.Trends are well-represented in this time frame because the H4 chart interval closely follows the D1 charts.Īfter setting up the chart, we have to determine the current market bias according to the following criteria: The foundation of this day-trading strategy is 200 EMA and 50 EMA that are applied to closing prices on any 4-hour charts. Instead of relying on the Moving Average crossover, we seek to buy/sell right after the trend is detected and exit on a profit right away. As one of the most well-known technical indicators in the world, Moving Averages serve as the foundation for numerous trend-following tactics.įor this day-trading strategy, we apply 200 and 50 Exponential Moving Averages (EMAs) on the 4-hour charts. ![]() The Moving Average is the best and simplest tool for traders hoping for a short-term profit with a trend-following approach. ![]() Instead of relying on the Moving Average crossover, this day-trading strategy seeks to find buy/sell signals based on price actions around 50 and 200 EMA.
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