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Forex 4-Hour

Stochastic EMA
Trend Trading
Strategy
Getting Started
This trading strategy relies heavily on catching the trend. You
may have success using this strategy on as low as the one hour
chart or as high as the daily chart; however, I’ve had most
success trading it on the four hour chart. This strategy consists
of four indicators, which are:
1. 5 Period Exponential Moving Average (closed)
2. 15 Period Exponential Moving Average (closed)
3. 50 Period Exponential Moving Average (closed)
4. Stochastic indicator K=13 D=5 Smooth=5 (13,5,5) 80/20
Levels

Refer to the picture above to see how your chart should look

How to Trade
There are only two, yet very important rules to follow when
trading this strategy.
1. The K% line on the stochastic indicator MUST be above the
D% line when taking a BUY & the K% line MUST be below
the D% line when taking a SELL.
2. Both the 5 & 15 EMA MUST cross the 50 EMA going
upwards to create a BUY signal OR downwards for a SELL
signal.

Let’s take a look at some examples:

In this example, we can see the K% is above the D% (as shown


by the bottom green arrow). We can also see the 5 & 15 EMA
have crossed the 50 EMA (as indicated by the upper green
arrow). Once both the 5 & 15 EMA’s have crossed the 50 EMA
going upwards, we would have taken a BUY.
Next example:

In this example, we can see the K% is below the D% (as shown


by the bottom red arrow). We can also see the 5 & 15 EMA
have crossed the 50 EMA (as indicated by the upper red arrow).
Once both the 5 & 15 EMA’s have crossed the 50 EMA going
downwards we would have taken a SELL.

As you can see, in both of these examples, we would have


caught the trend and made some major pips!
This concludes the Forex 4-Hour Stochastic EMA Trend Trading
Strategy

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