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Catching the Big Trend with the EMA Trend MT4 Indicator 

 July 17, 2016

By  Advanced Strategies

The EMA Trend MT4 Indicator is forex strategy that aims to spot and follow trend opportunities in the Forex market. Typically moving averages are not very good indicators for taking trades because they tend to lag. However, the use of various moving averages, ranging from short term moving averages to long term moving averages. The slower (long-term) moving averages serve to filter out the false signals and when a trend has been established, the various moving averages that make up the EMA Trend MT4 indicator can act as support and resistance for price action that is already in a trend, thus providing re-entry opportunities.

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EMA Trend MT4 Indicator Strategy and Trading Rules

The strategy is to look for when the asset is already in a trend. This means that the price action candle must already be above the highest moving average line on the chart or below the lowest moving average line on the chart. Once this is established, watch out for when the price starts to retrace either downwards to the highest line, or upwards to the lowest line. Where there is a bounce or a rejection, this is where the entry is to be made. If the price action is within the lines of the EMA Trend indicator, then the market is deemed to be in consolidation and there will be no opportunity for trading. 

EMA Trend MT4 Indicator Long Entry Rules

The trader should go long on the currency pair when the following setup is seen on the charts:

  • The price action candles are in an uptrend and have crossed above the highest EMA line.
  • Wait for the candlesticks to start pulling back downwards. Once the candle touches the EMA line and closes without breaking it downwards, initiate a LONG trade. This setup is displayed below.
EMA Trend MT4 Indicator Long Entry Rules
EMA Trend MT4 Indicator Long Entry Rules

Stop Loss and Take Profit for Long Entry

The stop loss is set at a few pips (about 20-30 pips) below the 2nd highest EMA line. By the time the price action has gone below the 2nd highest EMA line, it is most likely that the price action has started off a reversal and it would not be wise to keep losing pips to the market waiting for an uptrend continuation.

For the Take Profit settings, the pointer to be used in making this determination is when price action has started to retreat below the EMA lines. Apart from this, the trader may also decide to us a fixed number of pips equivalent to twice or three times the stop loss as the Take Profit point.

EMA Trend MT4 Indicator Short Entry Rules

The rules for a short entry are as follows:

  • The price action candles are in a downtrend and have crossed below the lowest EMA line.
  • Wait for the candlesticks to start pulling back upwards. Once the candle touches the lowest EMA line and closes without breaking above it, initiate a SHORT trade. This setup is displayed below.
EMA Trend MT4 Indicator Short Entry Rules
EMA Trend MT4 Indicator Short Entry Rules

Stop Loss and Take Profit Settings

The stop loss is set at a few pips (about 20-30 pips) above the 2nd lowest EMA line.

For the Take Profit settings, the following parameters are used:

  • Either the trader manually takes profit when the price action candles start to break above the 2nd lowest EMA line.
  • A fixed number of pips can also be used to set the profit target. This could be set to twice or three times the stop loss, keeping in view any support areas that may affect the downward movement of the asset.

Precautions when trading with the EMA Trend MT4 Indicator

The most important precautions to take with this trade are as follows:

  1. The trader must ensure that the asset is not locked within the lines of the EMA Trend indicator as this is a sign of a market consolidation. The trade will not perform to expectations if it is taken at this point.
  2. Always consider resistance and support areas when deciding on where to take profit. For instance, if price has approached a clear resistance during a long trade, it makes sense to close the trade than to wait for a price reversal below the EMA trend lines.
  3. Finally, trades are best setup with the 4-hour and daily charts as these are the charts that will produce the greatest profits for any setup.

Recommended Time Frames for the EMA Trend MT4 Indicator

Technically speaking, you can use this MT4 indicator for all time frames. However, the shorter the time frame, you will see more fluctuation and possibly more whipsaw which may cause small losses that can eat up your portfolio quickly. We recommend that you use higher time frames like the 4H for better consistency.


EMA Trend MT4 Indicator Download

We have provided this powerful trend trading indicator to you at no cost. We humbly request for your help to spread the word by sharing on one of the social platforms below. To unlock the download link, you just need to share this page to help us achieve our goal of helping more traders out there.

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Leave us a comment below to let us know your thoughts on this indicator. If you like this indicator, you might like see other indicators that we have carefully selected that will help you in your trading journey.

And if you can, you really should invest in a proven MT4 Expert Advisor to help you generate some profit on full autopilot. We highly recommend this powerful MT4 Expert Advisor.

Visit our Free MT4 Indicator Download page. We hope you have enjoyed this post as much as we have creating it. Good luck and thank you for your readership.


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