Simple to Follow: Triple EMA Scalping Strategy

Scalpers tend to look for consistent profit through small price movement. But, can you scalp using Triple EMA Strategy? How does it work?

Scalping is a trading strategy that traders use to focus on making profits from small price changes. It is a form of day trading that specializes in making high volumes of small profits. One good method for achieving this is the triple EMA strategy. The triple EMA strategy involves using 3 different exponential moving averages which serve as indicators. For this strategy, it is recommended to use time frames of 15 minutes and above. It can work with any currency pair and three EMA periods such as 10 EMA, 25 EMA, and 50 EMA.

Rules for Using the Triple EMA Scalping Strategy

EMA is considered one of the best indicators for scalping because of its simple look and fast response to real-time price changes. Traders usually use the indicator to obtain accurate buy and sell signals from crosses and divergences of historical averages.

So, what if you add the EMA lines to make it into Triple EMA? What are the Triple EMA trading rules to open a buying and selling trade?

For buying:

1. Once the 10 EMA crosses the 50 EMA to the upside, a pending order should be placed about 2-5 pips above the high of the candlestick that appears after the breakout.
2. The pending order then gets activated if the next candlestick happens to break the high of the previous candlestick. However, if this doesn't happen, just continue to move the pending order above each new high candlestick.
3. A stop loss should be placed 2 to 5 pips below the low of the candlestick whose high has been broken leading to the activation of the pending order that was placed initially. Alternatively, if there is a swing low point (support level), then it is better to use that as well and simply position the stop loss a few pips outside the support level.

For selling:

1. Once the 10 EMA crosses the 50 EMA to the downside, a pending order to sell should be placed about 2-5 pips below the low of the candlestick that appears after the breakout happens.
2. The pending order gets activated once the next candlestick breaks the low of the previous candlestick. However, if that does not happen, just continue to move the pending order below every new low that is formed.
3. A stop loss should be placed 2 to 5 pips above the high of the candlestick whose low has been broken leading to the activation of the order that was placed initially. Alternatively, if there is a swing high point (resistance level), then it is better to use that as well and simply position the stop loss a few pips outside the resistance level.

For the take profit:

1. The previous swing low levels can be used as the profit target for a trade that prioritizes selling while the previous swing high levels should be used as the profit target for a trade that prioritizes buying.
2. The trader may decide to not use the option of a profit target but instead uses a trailing stop by placing it behind every price swing. As the trade moves in your favor, you can keep riding that trend as long as the possibility of extracting maximum pips out of the price swing remains. Using this option allows you to lock in your profits in case of sudden reversals.

Closing Thoughts

This strategy is quite easy to use and understand. Also, it is ideal for strongly trending markets as the trader can capitalize on the potential to make profits at a rapid pace, which makes it suitable for scalping. While there are three indicators, the most important are two which are the 10 EMA and 50 EMA because the initiation of trade occurs due to the failure of the retracement that is a result of the 10 EMA crossing the 50 EMA.

Therefore, the 50 EMA is a support line when the price is above it, while it is a resistance line when the price is below it. This is why the 10 EMA must cross the 50 EMA line for a trade to be initiated so that the price does not bounce off from the 50 EMA line.

Besides the trading strategy, you also need to mind the spread when it comes to scalping. That is because scalping may require you to open multiple positions at once so the spread will be accumulated on top of one another. In this case, you should take a look at Raw Spread vs Fixed Spread for Scalping.