20 EMA Indicator Strategy for forex trading 2025

The 20 EMA (Exponential Moving Average) is a popular indicator among traders that shows price behavior over the past 20 periods. The 20 EMA is sensitive to price movements and reacts quickly. For this reason, it can help scalpers and swing traders on lower timeframes. Combining this indicator with a price action method can create a powerful, accurate strategy. The rest of the article will provide a thorough review of the 20 EMA indicator.

You can use the TradingView platform to use and test this indicator. Go to your TradingView chart, and then search for “Moving Average Exponential ” in the indicators section and add it to your chart. Next, open the indicator’s settings and set the length parameter to 20.

Scalping Strategy Using the 20 EMA

As you know, the 20 EMA acts as a support and resistance level. That is why breaking it is important to us.
When the price breaks the 20 EMA with strong, full-bodied candles, pulls back to it, and then forms a strong candle in the direction of the break, we can enter a position at this point for one or two rewards. In this strategy, you should close your position within several candles and avoid keeping your position open for a long time. The best timeframes for implementing this strategy are the lower timeframes.

Photo By TradingView

As you can see in the above example, we opened three positions using this strategy: two buy positions and one sell position. We used a risk-to-reward ratio of 1:2 in all three positions and were able to reach our profit target in a short period of time.

Using the 20 EMA for Swing Trading

In this strategy, we need to look for points on the chart where the market has entered a sideways trend and the prices have also become compressed. As you know, when prices are compressed, they often form small patterns. At this time, when the price breaks through the pattern and the 20 EMA in the same direction, we can enter a position. For this strategy, we can use risk-to-reward ratios of 1:3 and 1:4.

Photo By TradingView

As shown in the image above, the price enters a trading range and forms a triangle pattern. Then, it breaks above the 20 EMA and the triangle pattern, providing a valid entry signal. At this point, we enter a long position with a risk-to-reward ratio of 1:4, and eventually, the price reaches our profit target.

We hope you found this article useful.