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Trading Systems and Strategies
EMA-4-MTF-Strategy
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[QUOTE="Forexcube, post: 7238, member: 3573"] [b]General Remarks[/b] [SIZE="4"]General Remarks[/SIZE] EMA-4-MTF Exponential Moving Averagres For Multiple Time Frames Fast Moving Averages like EMA, - where more weight is given to the latest data - don't extend in the future, they can only follow market price. Fast moving average indicators are follow-up indicators which means it doesn't predict future market directions. It reflects the current situation on the market. The advantage is that it's easy to use and gives very good results when market is trending, during price break-outs and price movements. The characteristics of EMA's are in such a way, that it can change its signals any time, that's why you need to watch it all the time. When market trades sideways with very little fluctuation in prices (doesn't trending) it can give false signals, so it isn't suggested to use it. What there are to do when markets are trending sideways? Looking at the EMA's, the slope of the curve, as the inclination disappears,... a flat, next to horizontal EMA pattern starts to arise. Markets in sideway-phases doesn't make any new highs or new lows. You will be able to draw simple channel lines and watch the market trading inside that channel. A break out of the channel will reestablish a trending market mode. Editing: EMA 20 gives a current trend direction on 30 min, 1 h, 1 day chart. EMA 120 suggests a major trend direction on 30 min, 1 h, 1 day chart. Time frames If you trade 10 sec TF, than you trade 10 sec. and not 1 min. or a 5 min.-strategy, but you get more a global view (theoretical) by looking at 1 min and 5 min.-charts. When you trade 5 min, you trade only 5 min and you have your focus on the 5 min.-chart, (e.g. market goes up, bullish momentum - A). Good trading would be completly pointless without looking at 15 min chart and 1 h chart, when the main trend is qualify in reverse direction (e.g. downtrend, bearish momentum - B), ...even though you could trade this polar direction (A, bullish) with a simple 10-sec.-Strategy by the way. Thats only for making your mind about probabilities - it's depend on your preferences which one do you like to trade. MTF Multiple time frame strategy means the following. Sample: You could trade EURUSD 10 sec. up, EURUSD 5 min. down, EURUSD 1h up, EURUSD 3 h up, EURUSD 1 day down, EURUSD 1 week down simultaneously with the same currency, when EMA-4-MTF-Strategy pointed out all these signals on all these different timeframes. You're wellcome. [/QUOTE]
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