As a new forex trader, you need to learn how to identify the trend on the intraday charts. With a little practice using this 200 EMA Forex Strategy, you should be able to identify the trend on the different intraday charts. 200 EMA ( Exponential Moving Average) is one of the most popular and widely used technical indicator in forex trading.

This is a very simple forex trading strategy. What you need to do is open the 4 hour, 1 hour and the 15 minutes chart on your Meta Trader Platform. Plot the 200 EMA on these three charts, the 4 hour, 1 hour and the 15 minutes with red color.

Now, tile the three charts, the 4 hour, 1 hour and the 15 minute vertically. This will help you view all the three charts easily with one glance of your eye. Scroll through the different currency pairs like the USDCHF, GBPUSD, EURUSD, USDJPY or whatever you like to trade. Keep this in mind, choose that currency pair to trade that is liquid and has low spreads.

Search for a currency pair that has the price action well above the 200 EMA on the 4 hour chart and the 1 hour chart but below the 15 minutes chart. Similarly, you can also choose a currency pair that has price action below the 200 EMA on the 4 hour and the 1 hour charts but above the 200 EMA on the 15 minutes charts.

If the price action is above on the 4 hour and the 1 hour chart but below the 15 minutes chart, it means the price action is bucking the trend on smaller timeframe. Soon, it will rejoin the overall trend. Price is currently making a retracement on the 15 minutes chart so that it can rejoin the overall trend.

Search for a suitable entry point by looking for a candle signal like a hanging man or a hammer. For example, a hammer marks the reversal off a bottom or off a support level. When you see the hammer, it means a good signal for making a long entry into the trade. Appearance of a hammer is a signal that the price action has exhausted its downward momentum and is about to resume its upward momentum. Similarly, when you see a hanging man, it is time to sell. You can identify these entry and exit point with other candlestick patterns too!

Practice this simple forex strategy on your demo account. This is an easy exercise and can be done one or two times daily. It will not take more than a few minutes each time. After a little practice, you will see how powerful this simple forex strategy is.

So, in nutshell when you find the price action bucking the trend on the 15 minute chart while it is on the opposite side on both the 4 hour as well as the 1 hour chart, sit up and watch carefully to grab the opportunity to make a few pips.

Mr. Ahmad Hassam has done Masters from Harvard University. Get these Forex Scalping Cheatsheets plus the 10X Scalping System FREE. Download this award winning Forex Trading System that made 1,306.50% in one month FREE and watch the banned system video.

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Filed under: Currency Trading

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