### **1. Concept of EMA 200:** - **EMA 200** is an exponential moving average that represents the average closing price over the last 200 candles. It is widely used to identify the long-term trend. - If the price is above the EMA 200 line, the market is considered to be in a long-term uptrend. - If the price is below the EMA 200 line, the market is considered to be in a long-term downtrend.
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### **2. Combining EMA 200 with SuperTrend:**
#### **Indicator Settings:** 1. **EMA 200:** - Use EMA 200 as the primary reference for identifying the long-term trend.
2. **SuperTrend:** - Set the **ATR (Average True Range)** period to **10**. - Set the **Multiplier** to **3**.
#### **How to Use Both Indicators:** - **EMA 200:** Determines the overall trend (long-term direction). - **SuperTrend:** Provides precise entry and exit signals based on volatility.
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### **3. Entry and Exit Rules:**
#### **Buy Signal:** 1. The price must be above the EMA 200 line (indicating a long-term uptrend). 2. The SuperTrend indicator must turn **green** (confirming a short-term uptrend). 3. The entry point is when the price breaks above the SuperTrend line. 4. **Stop Loss:** - Place it below the nearest support level or below the lowest point of the SuperTrend line. 5. **Take Profit:** - Use a risk-to-reward ratio (e.g., 1:2). For example, if your stop loss is 50 pips, aim for a 100-pip profit. - Alternatively, target the next significant resistance level.
#### **Sell Signal:** 1. The price must be below the EMA 200 line (indicating a long-term downtrend). 2. The SuperTrend indicator must turn **red** (confirming a short-term downtrend). 3. The entry point is when the price breaks below the SuperTrend line. 4. **Stop Loss:** - Place it above the nearest resistance level or above the highest point of the SuperTrend line. 5. **Take Profit:** - Use a risk-to-reward ratio (e.g., 1:2). For example, if your stop loss is 50 pips, aim for a 100-pip profit. - Alternatively, target the next significant support level.
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### **4. Practical Example on USD/JPY:**
#### **Trend Analysis Using EMA 200:** - If the price is above the EMA 200 line, the market is in a long-term uptrend. - If the price is below the EMA 200 line, the market is in a long-term downtrend.
#### **Signal Confirmation Using SuperTrend:** - If the SuperTrend is green and the price is above the EMA 200, this reinforces a **buy signal**. - If the SuperTrend is red and the price is below the EMA 200, this reinforces a **sell signal**.
#### **Trade Management:** - Always place a stop loss carefully to avoid large losses. - Aim for a minimum risk-to-reward ratio of **1:2** (e.g., risking 50 pips to gain 100 pips).
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### **5. Additional Tips:**
1. **Monitor Economic News:** - The USD/JPY pair is highly sensitive to economic news such as U.S. Non-Farm Payroll (NFP) data, Bank of Japan monetary policy decisions, and geopolitical events.
2. **Use Additional Indicators:** - You can add indicators like **RSI** or **MACD** to confirm signals and reduce false signals.
3. **Practice on a Demo Account:** - Before trading with real money, test the strategy on a demo account to evaluate its performance and ensure it aligns with your trading style.
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### **6. Summary of the Strategy:** - **EMA 200:** Identifies the long-term trend (uptrend or downtrend). - **SuperTrend:** Provides precise entry and exit signals based on volatility. - **Timeframe:** H2 (2-hour). - **Currency Pair:** USD/JPY.
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### **Conclusion:** This strategy combines the power of **EMA 200** for long-term trend identification and **SuperTrend** for precise entry and exit signals. When applied to the **H2 timeframe** for the **USD/JPY** pair, it can be highly effective if executed with discipline and proper risk management.
**Final Answer:** $$ \boxed{\text{The strategy combines EMA 200 for long-term trend analysis and SuperTrend for precise entry/exit signals on the H2 timeframe for USD/JPY.}} $$
Open-source script
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
For quick access on a chart, add this script to your favorites — learn more here.
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.