Welcome to the one and only reliable Forex Portal for downloading indicators. In this post, we are introducing you to a custom coded EMA Trend indicator which you can install on Meta Trader 4. We will also explain what an EMA is and an except of a universal strategy used by professional analysts to make money.
What is an EMA in Forex Trading?
An exponential moving average indicator (ema) is the type of Forex tool used to track the most recent data points. This technical tool places significance and greater weight on the most recent average points.
Take home points
⦁ Traders use various settings when using the EMA, it can be a 20-day, 30-day, 90-day, and or 200-day exponential moving average.
⦁ An EMA indicator is used to generate buy and sell signals based on price divergence from historical average data points.
⦁ Unlike any other indicator, the EMA is a moving average that places a greater weight and significance on the most recent data.
What Do Professional Traders Read From The Exponential Moving Average?
The most used settings for this indicator are; 12-day and 26-day exponential moving average, mostly used when conducting short term analysis. Indicators like moving average convergence divergence (MACD) and the percentile price oscillator (PPO) are derived from the 12- and 26-day exponential moving average indicator. Analysts using this indicator are looking for the effect the market has on the most recent data points. Depending on the conditions, an EMA slanting upwards when you zoom in your chart has a bullish effect on prices.
The 50- and 200-day exponential moving average indicators are universally used for identifying long term buy and sell signals.
EMA Trend Meta Trader 4 Indicator
The exponential moving average (EMA trend indicator) is composed of four exponential moving averages. This custom indicator will help identify primary trend direction for almost any currency pair. Default input values for ema trend indicator are; FastMA period -21 and slow MA period – 34.
How Can You Use EMA To Produce Your Own Signals?
That’s a very good question because you don’t want to install a custom ema on your meta trader 4 platforms without knowing how you will use it. Professional traders out there commonly use EMAs in conjunction with other indicators to confirm significant market changes. You can use EMAs for the same purpose and also to define a trading bias. For example, look for buy signals only when the price is above all four ema indicators.
Using our custom EMA indicator is the modest form of technical analysis. We are going to show you an example of how you can execute a sell trade;
Step 1: Install the custom ema trend indicator, we provided the download link at the bottom of this article.
Step 2: Wait for prices to be below all 4 exponential moving averages. When prices cross all indicators, get ready to sell.
Step 3: Market prices will seem to be running away from the moving averages on the initial start of a bear trend, wait for a weak retest of the two closest indicators from your bear price action.
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Step 4: Execute a sell order when a retest has confirmed and place the stop loss 20 pips above the entry price for intraday trades.
Step 5: Take profit when price breaks above all EMAs.
Use the same logic for your buy trades as well and please note that the true nature of technical indicators is lagging indicators. They only react after a significant move has occurred, but note that many people use them and 20% out of those who use them make money. Unfortunately, you can never find a 100% perfect indicator because a working system has many components. The most important component of any trading system using indicators is YOU (the trader).
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