Trading setup based on the combination of EMA 9 and EMA 30 developed by Mike Burns. This strategy relies on the distance of the two moving averages to trade. As shown below:


Trading principles for buy command:

  • EMA 9 is above WMA 30
  • The two moving averages need to be far apart (see chart below).
  • The first candle to close below the 9 EMA will be the trigger candle for the buy command
  • Place a buy stop order above the highest price of the signal candle
Note: the candle that closes below the 9 EMA needs to remain above the WMA 30 for this setup to be valid.

As for the selling strategy, the principle is the same as above, but the opposite is true.

See the picture below to learn more about the buying strategy:


Trading principles for sell command:
  • EMA 9 is below WMA 30
  • The two moving averages need to be far apart
  • The first candle to close above the 9 EMA will be the trigger candle for the sell command
  • Place a sell stop below the low of the signal candle
Note: the candle that closes above the 9 EMA needs to remain below the WMA 30 for this setup to be valid. As shown below:


Note that we can add a reversal candlestick pattern to increase the rate for this setup.

HOW TO SET STOP LOSS, TAKE PROFIT FOR THE STRATEGY

As for the stop loss, we can follow the signal candles to place a stop loss. But if the effective signal candle is small, your stop-loss is easy to stick, now, to be more careful, you can place it below the WMA 30 line. As shown below:


Note that the larger the time frame, the more reliable the signal will be.

As for profit-taking, this is a trend following strategy, so we should move our stop loss along until a trend reversal occurs. As shown below:


WHEN TO USE THIS STRATEGY

This is a trend-following strategy, and we look for signals to trade in pullbacks, so it's best to use this strategy only when the trend is established.

Trends can also be determined by the following:
  • The uptrend is defined as the 9 EMA is above WMA 30
  • A downtrend is identified when the 9 EMA is below the WMA 30
The strength of the trend can also be measured through the slope of the moving average and the distance between the two moving averages. The larger the distance between the 2 MAs and the steeper the angle of the two moving averages, the stronger the trend. And vice versa

When the two moving averages cross, the trend-setting has strong momentum, you can use this strategy. Do not use the strategy in a sideways market.

Look at the chart below:


The important filter for signal candles

To increase the probability of this strategy, we have to add a filter for the entry signal candle. That is, instead of using a close candle above or below the 9 EMA, we can wait for a signal candle between the 2 MAs. As shown below:


The downside of this approach is that there are fewer trading setups. But the signal you get will be better.

Note: WMA cells are not available on MT4, so we need to install them. I put the WMA attachment below, you can download, install, and use.

SUMMARY

The EMA 9 and WMA 30 moving average combination trading strategy is a very effective trend-following trading strategy, applicable to many markets, on any timeframe.

This strategy should not be used as a trend reversal trading strategy but should rely on pullbacks to follow the main trend.

The stop loss is relatively small, but the profit you will get by following the main trend will be much larger, showing a very good RR ratio from this strategy.

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