34 EMA Scalping With Trend Lines Strategy
Using the 34 EMA as part of a breakout trading strategy can point you in the direction of the trend of the market. Combined with trend lines, it can also allow you to enter trades counter trend for quick scalping opportunities.
Any time you a trading counter to the 34 EMA, you are going against the longer term trend direction so you want to make sure you tightly manage your trade so you don’t get caught in the wrong direction.
34 Period EMA – exponential moving average
Technical Analysis Tool
Ability to draw trend lines consistently
You can use 34 EMA scalping strategy as a swing trading strategy as well but for this article, we are going scalp which generally means a smaller time frame. You can scalp larger time frames of course because scalping simply means taking quick profits as they are made available.
Time Frames To Use For Scalping
Currency Pairs For Scalping
We want to make sure we are scalping Forex pairs that have robust moves to them. Slower moving currency pairs will work as they also get momentum moves, we will stick with the higher traded pairs
Of course you can try other pairs but make sure that whatever pair you use does have a decent ATR – average true range, during your trading session.
Buy Scalping Setup Rules
Market is in an down trend as shown by the 34 EMA
Price breaks above a downwards trend line
Price breaks above the 34 EMA
Look for a very bullish candlestick or chart pattern such as horizontal channel
Let’s go through this chart to see how it plays out
34 EMA is showing that we are in a down trend on this five minute chart
The trend line (inner trend line) contains price until…..
Price breaks above trend line, breaks slightly above 34 EMA and then breaks upwards
Profit Targets and Stop Loss
You can use the 34 EMA breakout candlesticks low for a stop loss and use risk multiples for a profit target. You can also target previous pivot highs for a take profit target.
Whatever you choose to do, ensure you are consistent in your approach and use a rule based trading plan so your efforts are repeatable on every single trade.
Sell Setup Scalping Rules
Look for the 34 EMA to show we are in an uptrend
Price breaks below an upwards sloping trend line
Price breaks below 34 EMA
Look for a bearish candlestick or a chart pattern such as horizontal channel
I wanted to show a less than perfect scalping setup and in this example, price pulls back across the 34 EMA shortly after breaking down.
34 EMA slope shows that we are in an uptrend
Inner trend line (demand line) are usually much better than extreme pivots
Price has broken the EMA first and after a brief consolidation period (often a good entry location) price pushes below trend line
Great example of targeting prior swings for price targets