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8, 13, 21 EMA Strategy: How to use this strategy for consistent profit? 

 February 8, 2023

By  Advanced Strategies

8 13 21 EMA Strategy
8 13 21 EMA Strategy

8 13 21 EMA Strategy: How to use this strategy for consistent profit?

The 8, 13 and 21 exponential moving average (EMA) strategy is a simple trend following strategy that works best in a volatile market. The market volatility creates many false signals which make it hard to trade with this strategy. However, the 8, 13 and 21 EMA strategy can help filter out some of the false signals and provide a clear trading opportunity. This strategy is not perfect but it can be profitable if used correctly. In this blog post, we will discuss how to use this strategy for consistent profit.

4 Types of Moving Averages

There are three types of moving averages: simple, weighted, smoothed, and exponential.

Simple moving averages give equal weight to each price in the period being considered. Weighted moving averages place more emphasis on recent prices, while exponential moving averages put more emphasis on prices that have been recently trending.

Each type of moving average can be used to identify different trends in the market. Simple moving averages are best for identifying long-term trends, while weighted and exponential moving averages are better for identifying short-term trends.

What is the 8, 13, 21 EMA Strategy?

The 8, 13, 21 EMA strategy is a simple yet effective Forex trading strategy that can be used to consistently generate profits.

This strategy makes use of three exponential moving averages (EMA) with different time periods. The 8 EMA is used to calculate the short-term trend, the 13 EMA is used to calculate the medium-term trend, and the 21 EMA is used to calculate the long-term trend.

By taking into account all three timeframes, this strategy gives traders a good idea of where the market is heading in the short, medium, and long term. This information can then be used to make informed trading decisions.

There are a few different ways that this strategy can be executed but one of the most popular methods is to buy when the 8 EMA crosses above the 13 EMA and sell when the 8 EMA crosses below the 13 EMA. Another popular method is to buy when all three EMAs are pointing upwards and sell when all three EMAs are pointing downwards.

Whichever method you choose to use, this strategy can be a powerful tool for generating consistent profits in the Forex market.

How to use the 8 13 21 EMA Strategy?

There are three steps to using the 8 13 21 EMA strategy:

1.First, identify the long-term trend. This can be done by looking at a daily chart and identifying whether the overall price action is moving up, down, or sideways.

2.Next, apply the 8, 13, and 21-period exponential moving averages (EMAs) to the chart.

3.Finally, enter trades when the 8 EMA crosses above or below the 13 and 21 EMAs. Exit trades when the reverse occurs.

Let’s take a look at an example:

The circled area on the chart shows where the 8 EMA crossed below the 13 and 21 EMAs, signaling a short trade entry. The trade was exited when the 8 EMA moved back above the 13 and 21 EMAs.

This strategy can be used on any time frame from 5 minutes up to daily charts. It works best in trending markets but can also be used in range-bound markets with careful selection of entry and exit points.

  1. Buy signal: When the 8-day EMA crosses above the 13-day EMA and the 13-day EMA crosses above the 21-day EMA. This signals that the short-term trend is bullish and that it’s a good time to buy.
  2. Sell signal: When the 8-day EMA crosses below the 13-day EMA and the 13-day EMA crosses below the 21-day EMA. This signals that the short-term trend is bearish and that it’s a good time to sell.

What is the best strategy with 8 13 21 EMA combinations?

The 8 13  21 EMA strategy is a simple and effective way to trade the forex market. This strategy can be used on any time frame from the 1 minute chart up to the monthly chart. The key to this strategy is to identify the major trend and then trade with the trend.

The 8 13 21 EMA strategy uses three exponential moving averages (EMAs) with different lengths. The 8 EMA is used as a short-term signal line, while the 13 EMA is used as a medium-term signal line. The 21 EMA acts as a long-term signal line.

When all three EMAs are stacked on top of each other, it indicates that the market is in an uptrend. If the 8 EMA crosses below the 13 and 21 EMAs, it signals that the market has reversed into a downtrend.

This strategy can be used to trade both breakout and pullback setups. For breakout trades, you would enter when the 8 EMA breaks out above or below the13 and 21 EMAs. For pullback trades, you would enter when the 8 EMA pulls back to test support at the 13 or 21 EMAs before resuming its trend.

This strategy can be very profitable if traded correctly. However, like all trading strategies, there will be losing trades as well. It is important to have a solid risk management plan in place to protect your capital.

8, 13,21 EMA Strategy combined with the Parabolic SAR Indicator

The 13,21 EMA strategy is a simple yet effective trading strategy that can be used to trade a variety of markets with consistent success. The key to this strategy is to identify market conditions that are conducive to trend following and then to use the 13-day and 21-day exponential moving averages (EMAs) to enter and exit trades.

In order to use this strategy effectively, it is important to first understand how the EMAs are calculated. The 13-day EMA is simply the average of the past 13 closing prices, while the 21-day EMA is the average of the past 21 closing prices. These moving averages are lagging indicators, meaning they will not predict future price movements but instead will provide confirmation of trends that have already begun.

When using this strategy, it is recommended to look for conditions where the 13-day EMA has crossed above or below the 21-day EMA. This signals a change in market momentum which can be used as an entry point for a trade. Once in a trade, the 13-day EMA can then be used as a trailing stop loss to protect profits and limit losses.

The Parabolic SAR indicator can also be used in conjunction with this strategy to confirm entry and exit points. The Parabolic SAR indicator consists of dots that are placed above or below price depending on the direction of the current trend. If the dots are below price, this indicates an uptrend, while if they are above price, this indicates a downtrend. By combining the 13,21 EMA strategy with the Parabolic SAR indicator, traders can easily identify potential entry and exit points for their trades.

8 13 21 EMA Strategy and Parabolic SAR Buy Rule
8 13 21 EMA Strategy and Parabolic SAR Buy Rule

Buy Rules:

  1. The 8, 13, and 21 Exponential Moving Averages (EMAs) must be in a bullish alignment, with the 8 EMA crossing above the 13 EMA and the 13 EMA crossing above the 21 EMA.
  2. The Parabolic SAR Indicator must be below the price action and trending upward.
  3. Enter a buy position at the next candle’s opening price after the two conditions above are met.
  4. Place a stop loss below the previous swing low or at a level determined by your risk tolerance and market conditions.
8 13 21 EMA Strategy and Parabolic SAR Sell Rule
8 13 21 EMA Strategy and Parabolic SAR Sell Rule

Sell Rules:

  1. The 8, 13, and 21 EMAs must be in a bearish alignment, with the 8 EMA crossing below the 13 EMA and the 13 EMA crossing below the 21 EMA.
  2. The Parabolic SAR Indicator must be above the price action and trending downward.
  3. Enter a sell position at the next candle’s opening price after the two conditions above are met.
  4. Place a stop loss above the previous swing high or at a level determined by your risk tolerance and market conditions.

8, 13,21 EMA Strategy combined with the MACD Indicator

There are many different ways to trade the forex market, and each trader has their own unique strategy. However, one of the most popular and consistent strategies is the EMA Strategy combined with the MACD indicator.

The EMA Strategy is a trend following strategy that relies on exponential moving averages (EMA) to identify potential entry and exit points in the market. The MACD indicator is then used to confirm these signals.

Here’s how it works…

The first step is to identify the long-term trend of the market using a 200 period EMA. If the market is in an uptrend, then we only look for buy signals. Conversely, if the market is in a downtrend, then we only look for sell signals.

Once the long-term trend has been identified, we then switch to a shorter timeframe chart (usually between 1 – 4 hours) and look for price action signals that align with the long-term trend. For example, if we’re looking for buy signals in an uptrending market, we would want to see price make higher highs and higher lows on our shorter timeframe chart.

Once we’ve found a potential signal, we then switch back to our longer timeframe chart and use the MACD indicator to confirm it. We do this by looking for a crossover of the MACD line (the blue line) above or below the signal line (the red line). A bullish crossover indicates that we should enter a long position, while a bearish crossover indicates that we should enter a short position.

Once the signal is confirmed, we then need to determine our stop loss and take profit levels. To do this, we usually use a combination of Fibonacci retracement levels and support/resistance levels.

In summary, the EMA Strategy combined with the MACD indicator is a powerful trend following strategy that has been successful for many traders over time. While it may take some time to master its nuances, it can be an effective way to trade in the forex market.

8 13 21 EMA Strategy Buy Rule
8 13 21 EMA Strategy and MACD Buy Rule

Buy Rules:

  1. The 8, 13, and 21 Exponential Moving Averages (EMAs) must be in a bullish alignment, with the 8 EMA crossing above the 13 EMA and the 13 EMA crossing above the 21 EMA.
  2. The MACD Histogram must be above the zero line and the MACD line must cross above the signal line.
  3. Enter a buy position at the next candle’s opening price after the two conditions above are met.
  4. Place a stop loss below the previous swing low or at a level determined by your risk tolerance and market conditions.
8 13 21 EMA Strategy Sell Rule
8 13 21 EMA Strategy and MACD Sell Rule

Sell Rules:

  1. The 8, 13, and 21 EMAs must be in a bearish alignment, with the 8 EMA crossing below the 13 EMA and the 13 EMA crossing below the 21 EMA.
  2. The MACD Histogram must be below the zero line and the MACD line must cross below the signal line.
  3. Enter a sell position at the next candle’s opening price after the two conditions above are met.
  4. Place a stop loss above the previous swing high or at a level determined by your risk tolerance and market conditions.

Pros and Cons of the 8, 13, 21 EMA Strategy

There are pros and cons to any strategy, and the 8, 13, 21 exponential moving average (EMA) strategy is no different. On the plus side, this strategy can help traders identify potential trend changes early on. Additionally, using multiple EMAs can help smooth out price action and provide a more clear picture of the underlying trend.

However, there are also some drawbacks to this strategy. First, it requires constant monitoring as market conditions can change quickly. Second, using multiple EMAs can result in many false signals if not used correctly. Finally, this strategy alone is not enough to consistently generate profits – it must be part of a well-rounded trading plan that includes risk management and proper position sizing.

8, 13, 21 EMA Strategy Final Thoughts

The EMA strategy is a great way to trade the markets with consistent profit. This strategy can be used on any time frame and in any market conditions.

There are a few things to keep in mind when using this strategy:

1) The moving averages must be in the correct order. The 21 EMA must be above the 13 EMA for a long trade, and vice versa for a short trade.

2) Enter the trade when the price crosses above or below the moving averages.

3) Exit the trade when the price moves back across the moving averages.

4) Use stop losses to protect your profits.

This strategy can be used to trade stocks, Forex, futures, and other markets. It is a simple and effective way to consistently make profit from the markets.

8, 13, 21 EMA Strategy Top FAQ

1. What is the 8, 13, 21 EMA strategy? 
The 8, 13, 21 EMA strategy is a technical analysis trading strategy that uses exponential moving averages (EMAs) to generate buy and sell signals for a given security. The strategy uses three different EMAs to determine the short-term trend of a security and generates signals based on the relationship between these EMAs.

2. How does the 8, 13, 21 EMA strategy work? 
The strategy calculates the 8-day, 13-day, and 21-day EMAs for a given security and generates signals based on the relationship between these EMAs. If the 8-day EMA crosses above the 13-day EMA and the 13-day EMA crosses above the 21-day EMA, it generates a buy signal. Conversely, if the 8-day EMA crosses below the 13-day EMA and the 13-day EMA crosses below the 21-day EMA, it generates a sell signal.

3. What are EMAs and how do they work?
EMAs are a type of moving average that give more weight to recent price data. They are calculated by applying a percentage of the current price to the previous EMA value, creating a smoothed line that reacts faster to recent price changes than a simple moving average.

4. What is the significance of the 8, 13, and 21 time periods in the 8, 13, 21 EMA strategy?
The 8, 13, and 21 time periods are arbitrary and can be adjusted to suit the trader’s preferences. The theory behind using these specific time periods is that the 8-day EMA represents a very short-term trend, the 13-day EMA represents a short-term trend, and the 21-day EMA represents a medium-term trend.

5. Can the 8, 13, 21 EMA strategy be used with any type of security?
Yes, the 8, 13, 21 EMA strategy can be used with any type of security that has price data, including stocks, currencies, commodities, and more.

6. Is the 8, 13, 21 EMA strategy suitable for all types of traders?
No, the 8, 13, 21 EMA strategy may not be suitable for all types of traders. For example, day traders may prefer a strategy that generates signals on a shorter time frame, while swing traders may prefer a strategy that generates signals on a longer time frame.

7. How reliable is the 8, 13, 21 EMA strategy?
The reliability of the 8, 13, 21 EMA strategy, like any trading strategy, depends on a number of factors, including market conditions, the security being traded, and the trader’s risk tolerance. No trading strategy is 100% reliable, and it’s important to backtest and validate any strategy before using it in live trading.

8. Can the 8, 13, 21 EMA strategy be used in combination with other indicators?
Yes, the 8, 13, 21 EMA strategy can be used in combination with other indicators to help confirm signals generated by the strategy. For example, a trader may use the strategy in combination with momentum indicators or chart patterns to improve the accuracy of the signals.

9. What is the best time frame to use the 8, 13, 21 EMA strategy on?
The best time frame to use the 8, 13, 21 EMA strategy on depends on the trader’s time horizon and risk tolerance. Day traders may prefer a shorter time frame, while swing traders may prefer a longer time frame.

10. How can a trader determine the right stop-loss and take-profit levels when using the 8, 13, 21 EMA strategy?
Determining the right stop-loss and take-profit levels is a personal decision that depends on the trader’s risk tolerance and financial goals. Some traders use chart patterns, trend lines, support and resistance levels, or other technical indicators to determine their stop-loss and take-profit levels. Others use a fixed percentage or dollar amount as their stop-loss and take-profit levels. It’s important for a trader to have a well-defined exit plan in place before entering a trade to manage their risk and to lock in profits.

11. How can a trader determine the right stop-loss and take-profit levels when using the 8, 13, 21 EMA strategy? Determining the right stop-loss and take-profit levels is a personal decision that depends on the trader’s risk tolerance and financial goals. Some traders use chart patterns, trend lines, or support and resistance levels to determine their stop-loss and take-profit levels. Others use a fixed percentage or dollar amount as their stop-loss and take-profit levels.

12. How does the 8, 13, 21 EMA strategy perform in ranging markets?
The 8, 13, 21 EMA strategy may perform poorly in ranging markets, as it generates signals based on the short-term trend of a security. In a ranging market, the short-term trend may be unclear, leading to false signals and potentially losing trades.

13. Can the 8, 13, 21 EMA strategy be used for both long and short trades?
Yes, the 8, 13, 21 EMA strategy can be used for both long and short trades. A buy signal is generated when the 8-day EMA crosses above the 13-day EMA and the 13-day EMA crosses above the 21-day EMA, while a sell signal is generated when the 8-day EMA crosses below the 13-day EMA and the 13-day EMA crosses below the 21-day EMA.

14. Is the 8, 13, 21 EMA strategy affected by gaps in the price data?
Yes, gaps in the price data can affect the accuracy of the 8, 13, 21 EMA strategy, as they can create false signals or alter the relationship between the EMAs. It’s important to consider the presence of gaps when using this strategy and to adjust the calculation method accordingly.

15. How important is backtesting when using the 8, 13, 21 EMA strategy?
Backtesting is extremely important when using the 8, 13, 21 EMA strategy or any other trading strategy. Backtesting allows traders to evaluate the performance of a strategy under historical market conditions, which can help to identify its strengths and weaknesses and to determine its suitability for live trading.


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