(HELP) best EMA settings for 30 min chart EUR/USD

Beginner Questions
1

Hello all,

Just new to the forum, so thought i would introduce myself by asking a quick question.

I have been trading demo the past 5 months, using the RSI and Parabolic SAR, which was one of the first trading strategies i learned.

But now i have learned this and using it successfully, i would like to learn and use Moving Average indicators (EMA) and would like to know the ideal settings ofr trading on the 30 minute charts :33:

At the end of the month im looking to go live with a $250 account,
as i have been trading a ridiculous demo account size like $50,000, what would be the recommended lot size?

I was thinking 0.5? Any suggestions,

BTW im Paul :57:

Thanks for the help in advance :smiley:

2

There are no ideal MA settings, you can use MAs as a guide, but as for settings, it depends what purpose you want them to serve.

0.5 Lot size sounds a bit big for me, but the point is really, you need to understand for yourself how much your stake per trade is, by all means go live with that amount of money, but you need to realise that you will probably loose most of that if not all, keep learning and Good Luck.

3

I’ve been watching Raghee Horner’s 34 EMA Wave on one of my GBP/USD charts for some time. I have to say that I don’t make trading decisions based on it (although Raghee does). Instead, I look to it for confirmation of set-ups that I find using other tools.

The 34 EMA Wave is somewhat more complex than what you have asked about. But, I’ll describe it and show how it looks on my chart. I trade only the GBP/USD, and I keep 10 different GBP/USD charts up to date, on a daily basis.
This is one of the 10.

1280×932

This is a 1-hour chart of the GBP/USD, showing the 34 EMA Wave. Also on this chart, you’ll see the most recent portion of the 200-period SMA (the dotted gray line), and a graphic for measuring angles (the gold wedge shape). And, I have replaced the normal candles with Heikin-Ashi candles, on this chart only. Most of my charts employ standard candles.

The 34 EMA Wave is a triplet of related exponential moving averages: the top line (green) is the 34-period EMA of the candle highs; the middle line (gold) is the 34-period EMA of the candle closes; and the lower line (blue) is the 34-period EMA of the candle lows. In Raghee’s methodology, trading decisions can be made based on (1) the length and strength of an up-move or down-move of the Wave (with strength measured by the angle of the Wave), and (2) where price is in relation to the Wave.

If you want to delve into Raghee’s methodology, I would suggest that you watch her ForexAM webcast (live or via her archive). Here’s a link — ForexAM with Raghee Horner � Live Finance Video Network | StockTwits TV

Most traders who use moving averages, including exponential moving averages, say that they are equally applicable to all time frames. Raghee applies her 34 EMA Wave to time-frames from 5-minutes to 1-month. I don’t use it to the extent that she does, so I generally look at the Wave on just 2 charts, the 15-minute and 1-hour.

The conventional way to use an exponential moving average is to plot a single EMA of closing prices — in other words, the gold line on the chart above. Raghee’s Wave tends to put that one line into a context (i.e., between the highs and lows).

We know that support and resistance should be thought of more as zones, rather than discrete price points on a chart. Moving averages are dynamic indications of support and resistance, and therefore the zone idea applies to them, as well. Raghee’s Wave makes the zone around the central line visible.

As you can tell, I’m rather fascinated with the 34 EMA Wave. But, I’m not pushing it at you. If you get involved with it, use it at your own risk. If you get involved with it, learn to use it the way Raghee Horner teaches.

4

I have the 21, 50 and 200 ema on all my charts, regardless of timeframe, I find that they give me a feel for S&R levels. But as previous posters have noted, none of us is ‘right’ per se, this is a personal thing.

5

i would use 10,20,50 and 200! they give a good indication of where the price likes to pull back into

6

let me know if im wrong, but a .5 lot is 50,000 units. and if you are starting with 250.00 initially, even when leveraged to your eye balls, that is a ridiculous risk. however i have been trading for a shorter period of time than you. so i could be wrong.

7

Here’s something that you may find interesting:

S&P 500: Moving averages provide a simple solution - Education - Futures Magazine

As everyone has noted though: there is no such thing as an ‘ideal’ setting. This is one of the reasons why I’m so ‘dead against’ using automated backtesting software (such as MetaTrader’s Strategy Tester and there are dozens of other pieces of software that will do the same) i.e. most of this software will give you the option to ‘optimize’ the moving average settings (and in some cases the offset ‘into the future’) and ‘spit out’ an ‘ideal’ setting. The problem is that ‘ideal’ setting is only valid for the EXACT period under test i.e. change the period under test from, say, ten years, to one year, and the results are very different.

The above being said: one thing that does appear to be ‘common’ among ‘moving average gurus’ is that they should be offset (‘moved into the future’) by at least one half of their total period although the article above suggests, with proven results, that offsetting them by their (total) period produces better results.

For what it’s worth, and after testing many moving average ‘systems’ in the past, the one that I found the ‘best’ (if there is such a thing) is the moving average used by Bill Williams’ ‘Alligator Jaw’ also known as his ‘Balance Line’ i.e. a 13-period smoothed moving average shifted (‘moved into the future’) by 8-periods applied to the median price (H+L)/2. Larry Williams used to use a 13-period moving average but now uses a 26-period moving average applied to the close (I THINK i.e. it’s in one of my Larry Williams books which I’ve not looked at in a while i.e. I’m sure of the periods but unsure of the type and to what price they were applied).

Regards,

Dale.

9

And Packygee:

You’re quite right (although it COULD be broker dependant in some cases). But 0.5 lots would be ‘generally accepted’ to be 50 000 units which (on EUR/USD for example) would give you $0.50 per pip movement. That in and of itself is not a problem on any size of account WITH THE PROVISO that the potential loss on the trade does not exceed, say, 2% and therein lies the problem. The maximum loss on a $250 trade should not (using 2% per trade risk) exceed $5. At $0.50 per pip movement that gives your trade only 10 pips to ‘play with’ so unless you’re one DARN good trader and your system is producing an extremely high win/loss ration then no: it’s not a good idea to be trading with lot sizes of 50 000 units otherwise you’re not giving yourself enough opportunities to be ‘wrong’ and still have capital to trade with.

Regards,

Dale.

10

Dale, the broker I am currently using is Oanda and I believe customer support told me that if your account leverage is set to 50:1, that only applies to major pairs. They said that I could only trade 25:1 margin. Have you heard of that?

11

Margin Rules | OANDA fxTrade

12

alexus, the next time you post here, write something original, rather than copying and pasting someone else’s post.

1 Like
13

Like most of these traders have stated, it can all be relative. I’m not a fan of Moving Averages at all, but if I had to choose a moving average to use I would use the EMA as a reference. However, I have never found a decent strategy based off of any EMA period doing crossovers/crossunders of the OHLC. I think EMA strategies typically have to be more complex than that.

14

Indeed, I don’t pay that much attention to when they cross, I use them more as an updated line of resistance. I don’t trade just off the ema, but it is an area where I expect Price to react, so the ema is one of the factors I would take into account when looking to place a trade.

15

Well you’ve been given a lot of information here so you should have a good idea about the pros and cons of using moving averages.

There is ONE thing that I did forget to mention: in the equities market the two main moving averages watched are the 50-DAY and 200-DAY simple moving averages and their relation to each other. How effective this is for TRADING purposes I’ve not yet proved to myself. For INVESTMENT purposes it has it’s place. And how well it applies to FOREX TRADING or FOREX INVESTING I cannot say either.

Just a bit of useful (useless???) information.

Regards,

Dale.