EMACCI Trading Strategy

The EMA or exponential moving average is a very reliable trading indicator. In fact it is one of the most popular of trading indicators available and there are many different types of trading strategies that can be built from the EMA indicator alone.

EMACCI Trading Strategy, as the name suggests is a very simple trading strategy that makes use of two exponential moving averages and the CCI oscillator. This strategy can work in both intraday trading as well as swing trading. In other words, the EMA and CCI trading strategy works in both smaller as well as higher time frames.

Strategy Set Up

  • 40 EMA (Close)
  • 80 EMA (Close)
  • CCI (14)

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EMACCI Trading Strategy Rules

Long Set up:

  • 40 EMA must be above 80 EMA
  • Go long when CCI crosses 0 from below
  • Stop loss can be either fixed 20 – 30 pips or just below the recent low before the EMA cross over
  • Take profit can be again fixed or trailed with the 40 EMA

Short Set up:

  • 40 EMA must be below 80 EMA
  • Go short when CCI crosses 0 from above
  • Stop loss can be either fixed 20 – 30 pips or just above the recent high before the EMA cross over
  • Take profit can be again fixed or trailed with the 40 EMA

Strategy Examples

Long Set Up

1_ema-cci_long

  • The candlestick marked with the down arrow shows the area when the 40 EMA is already above 80 EMA.
  • We then wait for CCI to rise above 0, which is marked by the up arrow in the CCI indicator window
  • A long entry is placed at the high of the candlestick, with stop loss placed at the low just prior to the EMA cross over.
  • Take profit is a trailing stop near the 40 EMA
  • The above trade gave a very good 70 pip risk with a 292 pip profit.

Short Set Up

2_ema-cci_short

  • After the 40 EMA falls below the 80 EMA we then wait for the CCI to fall below 0 line
  • After CCI falls below the 0-line a short position is taken with stops just near the recent high
  • Take profit is trailed along the 40 EMA, which in this case resulted in a quick 39 pip profit

Conclusion

The Double EMA and CCI strategy is a very simple and easy to trade with forex trading system. With enough practice, traders will be able to turn this simple strategy into a very profitable one.

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