EMA crossover
A simple baseline for learning how lagging trend systems behave.
Use the one-page practice checklist
Keep the exact settings, long and short triggers, stop, no-trade filters and management rule beside the chart while you replay this method.
Worked example for demo practice, not a live trade signal.Keep the chart simple
What needs to be in place first
- Periods are fixed before testing
- Only confirmed bar closes are used
- Position size is volatility-normalised
See ema crossover from both sides
Choose a direction and follow the chart from setup to entry, stop and planned exit. The method stays the same; only the directional comparisons reverse.
Entry is above the trigger, invalidation is below the setup and a profit exit is above the entry.
- EEntryLONG ENTRY — next H4 open
- SStop / risk limitSTOP — 1.5 × ATR(14)
- XExitEXIT — next open after opposite cross
This synthetic H4 example uses completed EMA(20) and EMA(50) values after a hidden warm-up history. The stop is 1.5 ATR(14), and the planned exit is the next open after a completed bearish cross.
NO TRADE when separation is below 0.05 ATR, the signal range exceeds 2 ATR, an event is inside 24 hours, or the next-open gap exceeds 0.5 ATR.Check the market first
Fast/slow EMA separation on the signal close must be at least 0.05 × ATR(14).
Wait for the entry rule
Enter at the next H4 open after a confirmed eligible EMA(20/50) cross.
Place the stop before entry
Initial stop is 1.5 × ATR(14) from fill; risk 0.50% of equity and round down to 0.01 lot.
Know how the trade ends
Exit at the next H4 open after the first completed opposite EMA cross. The initial stop remains active; there is no fixed profit target.
Worked example: EMA(20/50) confirmed cross
This version of EMA crossover chooses one answer for every decision so you can repeat it. Treat the settings as a starting point to test, not as proven or recommended parameters.
EUR/USD, GBP/USD, USD/JPY and AUD/USD H4 UTC candles; both directions.
Only completed H4 closes update the signal; load 200 bars before the first decision.
One position per pair and no discretionary regime overlay.
Plot EMA(20) and EMA(50), both applied to close, plus Wilder ATR(14).
Define a cross only when the prior completed bar had fast EMA on or below slow EMA and the signal bar has fast EMA above it; mirror for shorts.
Record absolute EMA separation divided by ATR to identify flat crosses.
Give every tool one job
Direction, timing, volatility and risk are different questions. This stack assigns them rather than asking one indicator to do everything.
- Fast/slow EMA separation on the signal close must be at least 0.05 × ATR(14).
- The signal candle's range must not exceed 2.0 × ATR(14).
- No position is already open and the next 24 hours contain no scheduled high-impact event for either currency.
Enter at the next H4 open after a confirmed eligible EMA(20/50) cross.
Initial stop is 1.5 × ATR(14) from fill; risk 0.50% of equity and round down to 0.01 lot.
Exit at the next H4 open after the first completed opposite EMA cross. The initial stop remains active; there is no fixed profit target.
Cancel if the next-open gap exceeds 0.5 × ATR, separation falls below the threshold before entry, or the event filter becomes disqualifying.
Use a constant 1.2-pip spread, 0.2-pip adverse slippage on each market fill, zero commission and a 0.5-pip deduction per rollover.
Move through the chart one decision at a time
- Bar −2: establish prior state
EMA(20) is 1.0840 and EMA(50) is 1.0844, so the fast EMA remains below the slow EMA.
- Bar −1: cross closes
EMA(20) closes at 1.0848 and EMA(50) at 1.0846. With ATR at 40 pips, the 2-pip separation equals the required 0.05 ATR.
- Bar −1: filter
Signal range is 55 pips, below the 80-pip maximum, and the prepared event window is clear.
- Bar 0: enter
Next open is 1.0850; fill includes 0.2-pip adverse slippage and stop is fixed 60 pips below the fill.
- Bars +1 onward: hold
Do not exit because the EMAs narrow or price crosses one line. Only the initial stop or a completed opposite EMA cross can end the trade.
- Opposite cross: exit
When EMA(20) later closes below EMA(50), exit at the next H4 open, deduct costs and report net R and holding time.
A rejected example
Reject a nominal cross whose separation is only 0.02 ATR. This flat-cross filter is fixed before testing and must remain applied even when the subsequent chart trends.
Common variations
- Separate variant only: EMA(10/30).
- Separate variant only: SMA(20/50) control with every other rule unchanged.
- Separate variant only: fixed 2R target instead of opposite-cross exit.
Rebuild this method on the platform you use
The written rules work independently of the charting app. Match the same feed, timeframe, indicator settings and completed-candle timing before comparing results.
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Keep every test organised.
The CSV gives you one place to record the setup, costs, execution, outcome and whether you followed your rules.
Download test-plan CSV ↓