TIP: Trading with moving averages
|As many of you already know, Forex is the most amazing and popular electronic financial market: it moves 1.5 trillion dollars a day, what NY Stocks market moves in a year. A 24 hours a day, 7 days a week market, with high volatility and liquidity, and with a plus advantage: leverage. A market where you can choose to go bull or bear with no cost: no extra premiums to pay, no additional options. It seems pretty much convenient, right?
Well, let me tell you the disadvantages before I continue: high volatility, liquidity, leverage. Yes, just the same: advantages are disadvantages too. All these things can play against you as well as in your favor, with an extra: Brokers. Most retail traders must use a broker, who will be the counterpart in all transactions as there is no way to directly deal in the interbank market. And, as brokers are market makers, they can widen spread, or even refuse to trade during particular moments or conditions.
So, why are we here? What makes Forex so attractive? Where is the DIFFERENCE? A non written rule says only 10 % of Forex traders are successful, against the 90 % who blow their accounts. Believe it or not, the “90 % losers†trade without using technical analysis, without a working plan, without nothing but the ambition to become rich in the short term. Most Forex traders trade by impulse following a hunch more than a trend. Using guts instead of indicators or oscillators.
A simple and effective way to start with technical Forex trading is using Moving Averages: a Moving Average (MA) is a trend direction indicator that calculates a simple arithmetic average of prices for a particular period, showing the average value of the price of a currency over a set of values.There are different types of MA: we use SMA for simple moving averages and EMA for exponential ones. There are others kinds of MA (smoothed, linear weighted, etc) but we will limit this short study to the firsts ones, as they are the most used. Read More
Do you want to learn more?
REPORT: A Practical Guide to Moving Averages - S.A GhafariREPORT: How to Use Multiple Moving Averages: Trading with Heikin-Ashi Charts - Christian Kaemmerer
REPORT: Is Average or Below Average Performance Your Trading Problem? - Sam Seiden
VIDEO: How to profitably trade using moving averages - Rob Colville
VIDEO: Moving Averages - Carol Harmer
VIDEO: Using Moving Averages in Trading - Dean Malone
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