You can now download the Fast Crossover Forex Trading Strategy for free on AtoZ Markets indicators gallery.
Crossover strategies are widely used among retail traders. This is because it is simple, easy to understand and implement, and doesn’t take much analysis. Different combinations, parameters and periods of moving averages could work as a crossover strategy. However, there some combinations are more efficient than others.
Fast Crossover Forex trading stratgey consists of three moving averages at 10, 25 and 50-period Exponential Moving Averages (EMA). These EMAs are commonly used among traders to have a visual on what the short-term trend is doing. Most trend following and continuation strategies use some sort of moving average along the range of 10 to 25. The 50-period EMA though is more of a mid-term moving average.
This strategy is a basic moving average strategy that is geared towards the faster side. This would produce more signals which should allow the law of large numbers to work for us.
The two main moving averages that we should be looking at are the 10 and 50 EMA. What we are looking for is for the short-term trend, represented by the 10 EMA to cut through the mid-term trend represented by the 50 EMA. As soon as a crossover of the two occurs, then we should be ready for our setup.
The 25 EMA is also equally important. Although it is in the middle of both EMA and is usually not the main crossover signal, it also plays a big role on our exit strategy. Often times, when a trend starts to lose steam, price would crossover the 25 EMA and close beyond it. This crossing over and closing beyond the 25 EMA is our signal to exit the trade.
Currency Pair: any
How to trade with Fast Crossover Forex Trading Strategy?
Buy (Long) Trade Setup Rules
- Price and the 3 EMAs should be above the 200 EMA (blue)
- The 10 (gold) EMA should cross above the 25 (green) and 50 (brown) EMA.
- At the close of the candle corresponding the crossover enter a pending buy stop order at the high of the crossover candle and wait until order is hit.
- Set the stop loss below the 25 EMA (green)
- Close the trade if price closes below the 25 EMA
Sell (Short) Trade Setup Rules
- Price and the 3 EMAs should be below the 200 EMA (blue)
- The 10 (gold) EMA should cross below the 25 (green) and 50 (brown) EMA
- At the close of the candle corresponding the crossover enter a pending sell stop order at the low of the crossover candle and wait until order is hit.
- Set the stop loss above the 25 EMA (green)
- Close the trade if price closes above the 25 EMA.
How to download and install an indicator?
In order to install the indicator on your MT4 platform, you need to follow these steps:
- Click on “Download Indicator” button located at the top right corner of the screen.
- Save the file to your computer.
- Extract and move the files into MT4>Indicator folder of the MetaTrader4 software file directory.
- Restart your Metatrader platform.
- Navigate to “Indicators.”
- And select “Fast Crossover Forex Trading Strategy” template to apply it on the chart.
Note: This indicator was developed by T. Morris. AtoZ Markets does not carry any copyrights over this trading tool.