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Simple Moving Average Cross-Over Forex System

I want to share my favorite forex trading system with you. This very simple trading systems gives me 250 pips a month on average.

This system consists of two basic moving averages: the 5 EMA and 200 SMA. I only trade the Euro/Dollar during the Euro and US trading sessions.

My Preferences + Trading Setup: 

Currency Pair: EUR/USD

Trading Sessions: Euro and US

Preferred Timeframe’s: M5 and M15

Download link:

Click here to download the Simple Moving Average Cross-Over System

Forex Indicators:

Click here to download the Moving Averages Crossover Signals Indicator

5EMA (5 exponential moving average)

200SMA (200 simple moving average)

How the strategy works?

Entry rules:

BUY when the 5EMA crosses the 200SMA from below.

SELL when the 5EMA crosses the 200SMA from above

Exit Rules:

1) Close the trade for 30 pips profit or better.

2) Close the trade for a loss if the EMA crosses the SMA in the oposite direction of your original trade.

Stop Loss (my preferences):

I always use a 15-25 pips stop loss (depends on market volatility)

My stop losses are usually placed above the most recent resistance level (short trades) of below support (long trades).

Special notes:

  • Do not enter a trade on large bullish or bearish candlesticks. The risk is too high!
  • Do not trade on holidays. (sideways markets)
  • Do not trade before major economic news events (avoid whipsaws)

Example of Trade Entry

The 5EMA has crossed the SMA200 from above. I immediately sold the EUR/USD at the open of the next candle. The short trade hit my 30 pips target easily.

simple-moving-average-system

Moving Average Forex Trading Strategy Example: +49 pips 

Three trading setups are shown in the picture below. 2 sells and 1 buy. The first sell trade resulted in a 11 pip loss. The second buy trade resulted in a 30 pips gain. The third sell trade also resulted in a 30 pip gain. That’s a total of 49 pips in just one trading day.

movingaverage-cross-forexsy

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