120# EMA, RSI, Trading System

Two exponential moving averages with relative strength index (RSI)

Submit by Janus Trader 04/02/2012

Timeframe: 1-hour.

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.

3. 21-period RSI (RSI 21)

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.

Timeframe: 1-hour

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,

Fibonacci projection target.

Or when bearish engulfing patterns or inverted hammer patterns form.

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.


Share your opinion, can help everyone to understand the forex strategy

Comments: 1
  • #1

    Nich (Friday, 26 July 2013 15:48)

    This is a good strategy. However it may go wrong near global support or resistance. Trade with the day's trend is a rule in these cases.

RSI Forex Strategies