FOREX on averages
We sell to a moving average (MA basis of trade).
15 basic principles!
analysis trading price charts without averages (Moving Average, or simple MA) a bit similar to driving a car without wheels. These, at first glance, a simple winding lines that lie above or below the current market price, can pretty much tell the trader, and their proper use when analyzing the forex market is actually very beztsenno . Or more simply, they are actually more valuable indicators for trading in the technical analysis than others.
You certainly can sell without Averages (moving average) , but because trading, you are pretty serious risk, because These lines represent a boundary other than the median levels where Most of the professional traders have taken to themselves the important decisions , making deals for the purchase or sale. So, to you, as a trader who wants not just to trade on the forex market, and above all make , should be anticipated that Most of the players (traders) are going to do when approaching this average value.
Below I will 15 basic principles , which I advise you to use when trading the financial markets (and FX / FOREX, among others) by Moving Average (Moving Averages). Ie for successful forex trading, I advise you to place on the chart trading platform Metatrader 4 (which I believe is rightfully the most convenient for trade on financial markets) Moving Average indicator the following modifications:
20-day, 50-day, 200-day (EMA - in the "Preferences" tab choose the method of AI - Exponential) - at intervals ranging from daily: D1, W1, MN
5, 8-and 13th period moving average (SMA - in the "Preferences" tab choose the method of AI - Simple) - nA intraday charts: M1, M5, M15, M30, H1, H4
For convenience, for each medium, determine the color and if you want the line thickness. It will look so priblezitelno (for intervals of more days):
for intraday intervals:
And so proceed to consider the 15 key principles:
1st principle) 20-day Moving Averages are usually short-term notes the market trend, the 50-day Moving Averages - medium-term market trend, and the 200-day Moving Averages - long-term market trend. < / p>
2nd principle) The three major moving averages represent a nothing more than the natural limits for corrections in the market. It should be noted two important arguments in favor of these values:
they opredeyayut important levels, where the profit and loss must be weakened after a strong movement davolno.
recognition of these levels of market players, encourages traders to make self-realization of the strategy each time, once the price starts to approach these important levels.
third principle) moving averages often provide false signals, trader during sideways , because they are indicators that follow the trend and measure the upward or downward momentum. They completely lose his powerful performance in financial markets showing little or no movement in prices (the lateral movement or in other words, consolidation).
4th principle) Description of Moving changes as soon as they flatten and roll over. Turn moving average in the horizontal position indicates that the momentum for a given time interval is lost . And this in turn greatly increases the chances of the fact that price quite easily crosses the moving average (moving) is easy enough. When the averages of different periods are arranged in a horizontal line is very close to each other, it indicates that the market at any given time - the lateral movement or in other words "consolidation", which tells us that at any given time does not should receive signals from the moving averages. As well as the longer this happens konsalidatsiya prices, the stronger will be out in impulsive motion later.
5th principle) Moving averages give us constant signals, as they are formed exactly on top of the price. Their relative correlation with the further development of the price changes with each traced bar. They also point us to an active connection in the form of convergence and divergence with other kinds of support and resistance.
6th principle) I recommend that you use exponential moving averages (EMA) , for large time intervals. But it's also not forget to go to simple moving average (SMA) , for a short time intervals. EMA can give more weight to recent price changes. A SMA is able to consider any price movement of the same.
7th principle) Short-SMA to help traders understand how to act soon to be other players in the market. Professional traders use simple moving averages (SMA), as they basically do not understand the exponential moving averages. Good signals within a day longer rely just on what they think other traders, than on the situation from a technical point of view.
8th principle) encourage you to place 5, 8-and 13th period moving average (SMA) nA intraday charts to determine the strength of short-term trend. During strong trends, moving averages will line up and point you in the same direction. But remember that they are separated individually for maximum and minimum prices, as long as this price will not go in another direction.
9th principle) The fact, as the price is relatively 200-day moving average shows us the long-term strategy of professional investors and traders . They say - "Bulls live just above the 200-day moving average, and bears live below the 200-day moving average." Should fly above it, and sell below.
10th principle) At the moment when the 50-day moving average crosses the 200-day moving average in absolutely any direction, it points us to a significant change in the behavior of bears and bulls. If the 50-day moving average crosses the 200-day moving average from the bottom up, this phenomenon is sometimes referred to as "Golden Cross" , a movement called the downward "Deadly Cross" . < / p>
11th principle) Remember that for price is much more difficult to break through from the bottom up a declining moving average, than the bottom up through the rising moving average! And also vice versa, is much more difficult for prices to break down after rising moving average, than break down a declining moving average!
12th principle) moving average (moving), which are installed at different time intervals, will show you the rate of change of the trend, by their relations to each other. To measure this relationship can be when using the indicator MACD, or applying a lot of Moving to your price charts and watching while they diverge or converge relative to each other after a certain period of time.
13th principle) Just place the 60-day moving average of the histogram of the red-green color in the box below the price chart that you could determine when certain trading sessions show you the unexpected interest. The slope of the moving average will also identify the buying pressure or sellers at any given time.
14th principle) should not be used long-term moving averages to determine the short-term forecasts , because their signals will be far behind in the market. In such situations, the trend on the chart may be in the final stage to the moment when the moving average will give you a signal to buy or sell.
15th principle) Support and resistance levels are set moving averages, at a time when they diverge and come together. Must be considered when one average repel from another moving average, instead of quickly breaking through it, again pointing out the existence, thus, support or resistance. After the fact that the average crossing took place, this level will now support or resistance for future price movements.
That is, in principle, and there all the basic principles of trade by moving average . Then you just need to observe the behavior of moving averages on a chart and understand the examples of what was written here ...