The system I use is the simplest strategy in a trending market. On smaller time frames, we can find more trade setups with a little more risk and on higher time frames, the setup becomes extremely efficient.
E’MA’CD Strategy - That’s EMA and MACD
SETUP
TimeFrame 5mins (5 mins to 1 hr)
40 period EMA with High of Candles
40 period EMA with Low of Candles
MACD with default settings - 26, 12, 9
Entry - Buy:
EMA band should be in an uptrend and the prices should be above the EMA band.
Check for MACD crossover to the upside and when the price closes above the EMA band, buy with a stop loss below EMA low.
Exit with 3 or 4 pips of profit or when the MACD crosses to the downside.
Entry - Sell:
EMA band should be in an downtrend and the prices should be below the EMA band.
Check for MACD Crossover to downside and when the price closes below the EMA band, buy with a stop loss above EMA high.
Exit with 3 or 4 pips of profit or when the MACD crosses to the upside.
Signals to ignore:
When the prices are far away from the EMA band.
When the EMA band is flat.
Ignore sell signals on MACD in an uptrend or buy signals on MACD in downtrend.
Do not trade during high volatility periods
Below are charts attached with the strategy explained.
