EMA 200 & Awesome Oscillator: Trend Following Strategy

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EMA 200 & Awesome Oscillator: Trend Following Strategy

This strategy offers a simple yet effective way to trade with the major trend while minimizing risk. It uses the 200-period Exponential Moving Average (EMA) to define the long-term market direction and the Awesome Oscillator (AO) to pinpoint precise entry moments during momentum shifts.

Strategy Profile

Timeframe

H1 and Above

Pairs

All Pairs

Indicators

EMA 200 + AO

1. Indicator Setup

Set up your chart with the following indicators to identify the trend and momentum:

  • Trend Filter: Exponential Moving Average (EMA), Period 200.
  • Signal Trigger: Awesome Oscillator (AO), Default settings.

2. Long Entry (Buy) Rules

  1. Trend Check: The price must be trading ABOVE the 200 EMA.
  2. Trigger: The Awesome Oscillator histogram bars turn Green and are located above the zero line.
EMA 200 Awesome Oscillator Buy Strategy
Figure 1: Buy Signal – Price above EMA 200 with Green AO bars

3. Short Entry (Sell) Rules

  1. Trend Check: The price must be trading BELOW the 200 EMA.
  2. Trigger: The Awesome Oscillator histogram bars turn Red and are located below the zero line.
EMA 200 Awesome Oscillator Sell Strategy
Figure 2: Sell Signal – Price below EMA 200 with Red AO bars

Trade Management

  • Stop Loss: Set 5 points away from the previous swing High (for Sell) or Low (for Buy).
  • Take Profit: Set at a 1:1 ratio relative to the Stop Loss distance, or trail manually.

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