A strategy on the exponential moving averages

We’re going to see a strategy very interesting that we use in our everyday trading. It is a strategy based on the use of mobile media, one of the most interesting indicators that can be used in the currency market . With this strategy we will see how trading can be done very easily.

Before you start talking about this strategy , for the uninitiated, let’s see first what exactly is the moving average. Basically, it divides into two types, namely simple and exponential.

The simple moving average is basically given by averages over a given period of time. For example, if you are using a 20 SMA, what you see is actually a graph is the average of the last 20 trading days, if you’re looking at a daily chart.

As for the exponential moving average , is not simply the average for the 20 days, but actually gives weight to the different values. The most recent candle will therefore have a greater role, while data from the most distant candles have a lower weight.

In short, the exponential moving average, also called EMA , will be more reactive than the simple moving average, whose acronym is SMA .

This forex strategy based on moving average, we will use the EMA, precisely because that is more responsive. All you need to do is draw a graph at 20 and 50 EMA and add the CCI indicator.

At this point you may wonder how do I open a new location. What you have to do is wait for the 20 EMA break above or below the value of the EMA 50. Once this happens, you are going to analyze the CCI indicator to see if it is above or below the zero level.

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