120# EMA, RSI, Trading System
Two exponential moving averages with relative strength index (RSI)
Submit by Janus Trader 04/02/2012
In this system, we use 3 indicators:
1. 5-period Exponential Moving Average (EMA 5) applied to the Close.
2. 12-period Exponential Moving Average (EMA 12) applied to the Close.
Entry Rules for Long Trades:
It’s simple. We enter a long trade when EMA 5 crosses EMA 12 to the
upside… AND our RSI 21 > 50.
Entry Rules for Short Trades:
Enter short when EMA 5 crosses EMA 12 to the downside.
AND RSI 21 < 50.
Stop loss = 20 – 30 pips… depending on the volatility of the currency
pair. For more volatile pair, like GBP/USD, stop loss = 30 . For less
volatile pair, like EUR/USD, use stop loss of 20 pips.
Exit Rules for Long Trades:
Exit the trade when EMA 5 crosses back below EMA 12
Or when RSI 21 < 50.
Or when price stalls at major resistance, trendline, pivot points,
Exit Rules for Short Trades:
Exit our short trade when EMA 5 crosses above EMA 12
OR RSI 21 > 50
In the pictures below EMA, RSI, Trading System in action.
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RSI Forex Strategies