Turn The Tables With The '25 EMA-50 SMA-RSI' Strategy!

It is time for another very simple and rewarding strategy!

The 25-EMA-50-SMA RSI is a super simple strategy with no tedious analysis expected from you. It comprises of two indicators that work very well together, a lagging and a leading indicator.

The lagging indicators are the 25 EMA and 50 SMA and the leading indicator is the RSI 14 in this case.

Note: You may use a 50 EMA instead of a 50 SMA. The only difference is that the EMA is more sensitive to price change compared to the SMA. I personally use the 50 SMA not because I think it’s better but simply because I feel more comfortable doing so.

Ok, lets get down to business and show you how this system works.

STEP 1- Pull out a Daily chart and add the following:

• 25 EMA (Orange)
• 50 SMA (Blue)
• RSI 14

Short trades will be taken if two conditions are met:

• Price opens below 50 SMA where 25 EMA will act as a resistance line in case price retraced back.
• RSI is clearly below 50 line and heading down.

Long trades on the other hand are the complete opposite of short ones.

Long trades will be taken only if following conditions are met:

• Price opens above 50 SMA where 25 EMA will act as a support line in case price retraced back.
• RSI is clearly above 50 levels and heading north.

This is one of the simplest strategies you may come across in the trading world. Even if it has weaknesses, a mechanical approach if taken can bring you a nice profit at the end of each month.

My advice would be to use a stop loss of 100pips no more no less. Take partial profit when price reaches 100 pips bringing your stop loss to break-even. Let the remaining portion run the race to profit.

To you success,Ash Naeck