Moving Average is probably the simplest Forex indicator traders can use to make certain observations on the market. With it, they can determine the simple trend of the market - whether it is expanding or shrinking. The Moving Average is basically an average (or mean) of all the individual prices in the data set and contains two separate indicators: Simple Moving Average (SMA) and Exponential Moving Average (EMA).

1. Moving Average Strategies
for Forex Trading
Presented by
The Forex Secret

2. Moving Average Strategies
1. Moving averages are a frequently used
technical indicator in forex trading,
especially over 10, 50, 100, and 200 day
periods.
2. The below strategies aren't limited to a
particular timeframe and could be applied to
both day-trading and longer-term strategies.

3. • Moving average trading indicators can be used on their
own, or as envelopes, ribbons, or convergence-
divergence strategies.
• Moving averages are lagging indicators, which means
they don't predict where price is going, they are only
providing data on where price has been.
• Moving averages, and the associated strategies, tend
to work best in strongly trending markets.
Moving Average Strategies

4. Moving Average Trading
Strategy
• Plot three exponential moving averages—a five-
period EMA, a 20-period EMA, and 50-period
EMA—on a 15-minute chart.
• Buy when the five-period EMA crosses from
below to above the 20-period EMA, and the
price, five, and 20-period EMAs are above the
50 EMA.

5. • For a sell trade, sell when the five-period EMA
crosses from above to below the 20-period EMA,
and both EMAs and the price are below the 50-
period EMA.
• Place the initial stop-loss order below the 20-
period EMA (for a buy trade), or alternatively about
10pips from the entry price.
Moving Average Trading
Strategy

6. • An optional step is to move the stop-loss to break
even when the trade is 10 pips profitable.
• Consider placing a profit target of 20 pips, or
alternatively exit when the five-period falls below
the 20-period if long, or when the five moves
above the 20 when short.
Moving Average Trading
Strategy

7. • An optional step is to move the stop-loss to break even when the
trade is 10 pips profitable.
• Consider placing a profit target of 20 pips, or alternatively exit
when the five-period falls below the 20-period if long, or when
the five moves above the 20 when short.
Moving Average Trading
Strategy

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