BEST Moving Average Strategy For Daytrading Forex (SECRET METHOD) ( Moving Average Explained )

__________________________________________________________________________________________
Become a member of the channel to get access to perks
Patreon:-
https://www.patreon.com/tradeprime
__________________________________________________________________________________________

In this video I am going to share the right of using moving averages to generate consistent profits.

By definition, a moving average is a technical indicator that calculates the average close price of an asset, over a particular period of time. This means, that a 10 period moving average will show the average close price of the last 10 candles.

Different moving averages can be used to identify different trends. For instance, a 200 period moving average can be used to identify the long term trend of the market.

Similarly, a 50 period moving average can be used to identify the medium term trend of the asset. And lastly, a 20 period moving average is used to identify the short term trend of the market.

For the purpose of this video, we will use the 50 period moving average. But, you can apply any moving average and backtest it to see the results.

So, why should we use the moving average indicator?

Reason number 1. Moving average can help us in identifying the trend of the market.

One of the basic uses of a moving average is that it clearly shows us the trend of the market. For instance, if the price is above the moving average, and the moving average is sloped upwards, we can say that the price is in an uptrend.

Similarly, if the price is below the moving average, and the moving average is sloped downwards, we can say that the price is in a downtrend.

Lastly, if the price is revolving around the moving average, and the moving average is flat, the market is said to be in a sideways trend.

The second reason is that moving averages show change in the trend.

Look at this chart. Here we can see that initially the price was in a downtrend. But after the break of the moving average, the price went into an uptrend. Hence, the break of the moving average can alert us to a shift in the trend

Here on this chart, we can see that the the price was initially in an uptrend, then it crosses the moving average, and a strong downtrend begins.

The third reason of using the moving average is that it often acts as a dynamic area of support and resistance. Here is the 50 period moving average. We have a clear uptrend here as the moving average is sloped upwards and the price is trading above the moving average.
Look at these points. Here, the price makes a pullback and finds support at the moving average, and then reverses.

Oppositely, in a downtrend, the price will often find resistance at the moving average. This indicates a possible trend continuation.

An important point to remember here is that, we will not use these reasons alone to make trades. Instead, we will use these points in conjunction with other concepts to initiate any trades.

Видео BEST Moving Average Strategy For Daytrading Forex (SECRET METHOD) ( Moving Average Explained ) канала Trade Prime