How to use 10 EMA for entry on 4-hour chart

The 10 EMA is one of the most popular moving averages among all ages of traders.Perhaps it is popular because it is most dynamic.Moreover,it can deliver more wins than losses if combined with atleast another indicator like fibonacci or stochastics.

The  4-hour USDCAD chart above shows how 10 EMA and stochastics are combined to generate a trade entry.The stochastics was already showing overbought when the price was also moving above the 10 EMA.Traders will wait for a confirmation to ascertain that the pair is actually overbought before they pull the trigger.

 

The fact that the stochastics says overbought means that buyers should thread with greater caution and sellers should watch out for their turn which may come in no time.The overbought is confirmed when the red candle in the yellow ring closed well below the 10 EMA.The best entry price is to place a sell order at about 5 pips below the same red candle.This is to avoid whipsaws.
So, we saw overbought on stochastics and wait for price to close below the 10 EMA so as to have a set-up candle.Once we have a set-up candle that confirms the scenario, the next step is to sell at 5 pips below the same set-up candle. You may please forward your question or leave a comment. I am the author of this blog. I can write for you on your forex blog too for a token.