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Moving-Average Crossover (Trend Following)

Setup & Indicators

  • Fast EMA: Period 10
  • Slow EMA: Period 50
  • Timeframe: H1 or H4
  • Additional Filter: ATR(14) > 0.0005 for minimum volatility

Entry

  • Long: EMA10 crosses EMA50 from below and ATR confirms sufficient trend strength.
  • Short: EMA10 crosses EMA50 from above.

Exit & Trailing

  • Stop-Loss: 1.5 × ATR(14) below/above the crossover point.
  • Take-Profit: 2 × risk (Risk/Reward = 1:2) or dynamically with a trailing stop = 1 × ATR.

Risk Management

  • Max. risk per trade: 1–2% of account equity.
  • Position size: Choose volume so that SL distance × volume ≤ max. risk.

 

Example chart: Moving-Average Crossover with EMA10/EMA50 and ATR(14)
Example chart for the Moving-Average Crossover trend-following setup.

 

  • Upper panel (Price with EMAs):
    • Yellow line: Closing price (Close)
    • Orange line: EMA10
    • Red line: EMA50
    • ▲ Long entry, ▼ Short entry, only if ATR(14) > 0.0005
  • Lower panel (ATR(14)):
    • Yellow line: ATR(14)
    • Dashed line: Minimum volatility threshold (0.0005)

Chart Interpretation

  1. Long entry: EMA10 crosses EMA50 from below and ATR(14) is above the threshold.
  2. Short entry: EMA10 crosses EMA50 from above with sufficient volatility.
  3. Stop-Loss & Take-Profit: Based on 1.5 × ATR below/above the crossover and R/R = 1:2 or ATR-based trailing.

This way, you get a visual confirmation of the setup in the H1/H4 context before applying risk management (1–2% per trade, position sizing).