The simple moving average is one of the most effective tools you can use. It’s a favorite indicator of trend followers and is easy to use.
Here we are going to look at a specific one, that although simple gets the edge on the big boys and is ideal for entering trends.
Moving averages as a trend indicator for currencies can be briefly described as a line the greater it rises the more expects it to go up. Essentially the equation is line works to give an average of price over a certain period of time.
If you are a downside looking currency trader you would only want to use a moving average indicator in your forex trading strategy. 정보이용료 현금화 The reason is that all short term price spikes are temporary and prices tend to return back to the average eventually.
The averaging principle works very well in markets that are trending, but as soon as the price action changes trend followers start to lose money.
There are lots of moving averages and they are all designed to detect price spikes and reverse the current trend. The most popular ones are the 50, 100 and 200 day moving averages.
When using a forex trading strategy an average is needed to call the final price.
Trading is all about making profits and to do this you have to multiple the lot size to your advantage.
Why You Need More Than One Per Trade
A good way to do this is to trade infrequently you don’t get many trades but if you win they will be winners and if you lose, you have plenty of losers so trade less and lose less.
The simple moving average is a good tool for all traders and although you don’t get highs or lows, they give you areas to look at and you can spot areas to enter trades with good risk to reward.
Here we show you how to spot the opportunity
Spotting a trend change means seeing a unique candle pattern that contains a mix of near and far positions. Look for a candle that contains a large peak in the price so prices have a tendency to continue upwards. Wait for the price to move past this high and look for a low at the last level of the candle which is also normally deep.
When this happens the currency is indicating a price change in the direction of the trend and an opportunity to enter a high odds trade. Enter the trade when the price crosses this support and exit the trade when the price breaks through this resistance.
You can also use some momentum oscillators to warn you of changes in price and see how overbought or oversold the currency is. The best ones to use are the MACD, stochastic and RSI.
All the above methods are simple ways to get into trades and they will work. Forex swing trading is a fun and powerful way of trading and if you want a method to seek out the big turning points in the market, there is no better method than forex swing trading.