Overview
This lecture explains how to set up and trade the 9/20 EMA (Exponential Moving Average) crossover strategy, both the conventional method and with RSI (Relative Strength Index) confirmation, on TradingView and MT5 platforms.
Chart Setup on Trading Platforms
- Add two EMAs (periods 9 and 20) to your chart and use different colors for each.
- Add the RSI indicator with default settings (period 14, close price).
- On TradingView, use the Indicators menu to add EMAs and RSI.
- On MT5, use Insert > Indicators > Trend for EMAs and Insert > Indicators > Oscillators for RSI.
- RSI above 70 = overbought; below 30 = oversold.
9/20 EMA Crossover Strategies
Conventional 9/20 EMA Crossover
- Buy when the 9 EMA crosses above the 20 EMA; sell when it crosses below.
- Choose your entry on the crossover or after a pullback to EMAs.
- Set stop loss at the previous swing low (for buys) or swing high (for sells).
- Target a risk-reward ratio of at least 1:2 or exit on the next crossover.
- Best used during high market activity (e.g., London/New York overlap for Forex).
9/20 EMA Crossover with RSI Confirmation
- Enter trades only when EMA crossover aligns with RSI conditions (overbought/oversold).
- Sell only when the 9 crosses below the 20 and RSI is above 70 (overbought).
- Buy only when the 9 crosses above the 20 and RSI is below 30 (oversold).
- Stop loss and profit targets use the same approach as the conventional strategy.
- Offers potential for larger trend trades if you stay in until the next crossover.
Trade Management
- Every trade requires: entry, stop loss (using swing highs/lows), and a profit target.
- For strong trends, consider exiting only on new crossovers for bigger moves.
- Avoid short time frames or flat/choppy markets, as these produce frequent false signals.
Key Terms & Definitions
- EMA (Exponential Moving Average) — A moving average that gives more weight to recent prices.
- 9/20 EMA Crossover — A strategy where trades are based on the interaction of 9-period and 20-period EMAs.
- RSI (Relative Strength Index) — An oscillator indicating overbought (above 70) or oversold (below 30) conditions.
Action Items / Next Steps
- Practice setting up and trading the 9/20 EMA crossover (with and without RSI) on a demo account.
- Focus on applying the strategies during active trading periods for your chosen market.
- Review upcoming live streams at howtrade.com for real-time examples.