50 EMA & 200 EMA Crossover Trading Strategy Used in Forex, Stocks, Cryptocurrency
Is 50 EMA & 200 EMA crossover trading strategy effective? This indicators are very popular when it comes to trading forex, stocks, cryptocurrencies and even synthetics like Volatility 75 Index, Boom and Crash, Step Index, and even precious metals like Gold and Silver. If you are new to trading, you might wonder what strategies you should follow because the internet was filled with trading “gurus” and you will only end up with confusions.
Trading and Investing blog will give you an idea which strategy is the best especially when you are using indicators like 50 EMA and 200 EMA. The so called powerful indicators when combined will make you a beast trader.
50 EMA & 200 EMA Crossover Trading Strategy Used in Forex, Stocks, Cryptocurrency
50 EMA (Exponential Moving Average)
The 50 EMA is already installed in meta trader 4, meta trader 5, and even in Trading Views and other popular trading platforms.
The 50 EMA will serve as the support and resistance. Take a look at this chart, and find out if you can spot easily the support and resistance in a channel, or in a trend.
200 EMA (Exponential Moving Average)
The 200 EMA (Exponential Moving Average) will; filter the overall trend of the market. This will give you an idea. If for example,
- DOWNTREND – price is below 200 EMA
- UPTREND – price is above 200 EMA
Trading with Both 50 EMA and 200 EMA the Easy Way
There is no such thing as guaranteed profit when trading. Every trades is all about “probability”. And you will have an edge on the market when you know where the market is going. You can’t predict the market, but through the use of 50 EMA and 200 EMA alone will give you an idea whether you will BUY or SELL.
A. BUY OPPORTUNITY → when 50 EMA crossed above 200 EMA (look for buy only).
B. SELL OPPORTUNITY → when 50 EMA crossed below 200 EMA (look for sell only).
There is no such thing as perfect entry. In trading you must know your risk and reward. You must have a trading plan and always analyze your risk and reward. The 50 EMA and 200 EMA is somewhat profitable whether your scalper, day trader, swing trader, position trader, etc. It will become a good trading strategy when you will filter the trend or price actions using RSI Relative Strength Index and Stochastic Oscillator Indicator for oversold and overbought conditions of the market.
Do not trade on hearsay! Trade what’s on your chart! What you see is what you can get based on the 50 EMA and 200 EMA. Simple trading strategy isn’t it? You can get for as low as 50 pips a day using this strategy if you will follow this trading strategy strictly. Well, let me know if this strategy works for you, too. Leave a comment below!