Forex Trend Trading With a Simple Moving Average
By Nathan Navachi
While many new forex trading systems are based on complicated mathematical market analysis models, some of the most effective forex trading strategies are also the simplest. One of these simple and highly effective strategies is trend trading, where you simply see which direction the market is trending in and then you trade in that direction. If you were trading the EUR/USD currency pair, the way that you could identify the direction of the trend is to open up a daily chart and overlay a simple moving average on the chart. If the direction of the moving average is up, then the pair is in an uptrend; if the moving average line is down, there is a downtrend; and if the line is horizontal then there may be no trend.
Trend trading is a proven way to earn profits in the forex market since it is an established fact backed by decades of market research that currency pairs (and indeed literally all markets) move in trends. If the trend is up then it makes sense to buy, if the trend is down then it makes sense to sell, and if there is no trend then it may not be a good time to trade. The best way to get an accurate sense of the overall trend is to look at a long-term price chart such as a daily, weekly, or monthly chart and see which direction the moving average line is pointing. While it may not be practical to use a monthly chart for trading signals, it can let you see in a quick glance where the market has been and where it will be headed if the trend continues.
It is a general rule of interpreting trading signals that the longer the period of the price chart is, the more reliable the trading signal will be. This strategy of determining the trend and then trading in that direction could be used on a chart as small as a one minute candlestick chart or as large as a daily or even weekly chart if you are really a long-term trader. Now while trading signals from long-term charts can be more reliable, there is also larger risk involved with keeping a trading position open for days or weeks at a time. If you plan to trade on these types of longer time frames, be sure to factor in the amount of leverage you are using as a function of how many pips you are willing to risk on a loss.
On the short-term side, this strategy can be used on a 1-minute or 5-minute chart but the signals may not be as reliable and the trend itself may be erratic and rapidly changing. It is common sense that the steepness of the moving average line indicates how quickly the market is moving up or down, and if you can identify a fast moving trend on this type of price chart then you open yourself up to large gains if you can enter in on the right side of the market and ride the trend for as many pips as possible before the market retraces itself.
The easiest way to learn forex trading is by watching videos. Go to this YouTube video and watch a video commentary for this article.
Nathan Navachi is a professional trader who built http://TheCurrencyMarkets.com as a valuable resource to introduce the world to the forex market.
Article Source: http://EzineArticles.com/?expert=Nathan_Navachi
http://EzineArticles.com/?Forex-Trend-Trading-With-a-Simple-Moving-Average&id=2690813
Video scenes shots:
Watch the video:
| URL: | |
| Embed: |
Other videos by this author:
 |
Uncle Mike -www.teachtalktrde.com Posted by: unclemiketrader
Video duration: 618 seconds Day trading chat room, trend trades, retracements, countertrend trades, jump on trend trades, join me in my educational trading room to learn trading methods and risk and money management systems. Visit www.teachtalktrade.c om for more information. |
 |
Day Trade with Uncle Mike Breakout Trade Posted by: unclemiketrader
Video duration: 574 seconds Here is a breakout trade taken in the trading room today, it was from the 6K chart part of Uncle Mike's Trade Assistant. Come join me daily in trading the S&P emini and 6E and other futures. |
 |
Day Trading - Break Out trade with Uncle Mike Posted by: unclemiketrader
Video duration: 593 seconds Trade a breakout trade using Uncle Mike's Trade Assistant for Ninjatrader or Tradestation, works on all futures. Give my trade room a try, see webiste for an Open House to try it or join me daily. |
 |
Tips for listing your home.mp4 Posted by: unclemiketrader
Video duration: 114 seconds Here are a couple of tips for you in listing your home. The Lesniak & Rocheleau Home Team have unique marketing strategies to get your home sold in this market! |
 |
daytrading_050410.mp4 Posted by: unclemiketrader
Video duration: 168 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
 |
Day Trading the S&P Emini & Currency Futures with Uncle Mike 4/14/10 Posted by: unclemiketrader
Video duration: 203 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
 |
daytrading010810.mp4 Posted by: unclemiketrader
Video duration: 212 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
 |
weathervane1.mp4 Posted by: unclemiketrader
Video duration: 341 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
 |
Daytrading the S&P Emini & Currency Futures with Uncle Mike Posted by: unclemiketrader
Video duration: 120 seconds |
 |
Day Trading the S&P Emini and Currency Futures with Uncle Mike 9/22/09 Posted by: unclemiketrader
Video duration: 195 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
 |
Day Trading the S&P Emini and Currency Futures with Uncle Mike 9/22/09 Posted by: unclemiketrader
Video duration: 130 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
 |
Day Trading the S&P Emini & Currency Futures with Uncle Mike 9/10/09 Posted by: unclemiketrader
Video duration: 141 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
 |
Day Trading the S&P Emini and Currency Futures with Uncle Mike 9/9/09 Posted by: unclemiketrader
Video duration: 175 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om |
 |
Day Trading the S&P Emini and Currency Futures with Uncle Mike 9/8/09 Posted by: unclemiketrader
Video duration: 271 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
 |
Day Trading the S&P Emini and Currency Futures with Uncle Mike 8/26/09 Posted by: unclemiketrader
Video duration: 274 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
 |
Day Trading the S&P Emini & Currency Futures with Uncle Mike 8/25/09 Posted by: unclemiketrader
Video duration: 153 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
 |
daytrading082009 Posted by: unclemiketrader
Video duration: 261 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
 |
Day Trading the EC Currency Futures with Uncle Mike Live Trades Posted by: unclemiketrader
Video duration: 581 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
 |
Day Trading the S&P Emini & Currency Futures with Uncle Mike 8/13/09 Posted by: unclemiketrader
Video duration: 279 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
 |
Day Trading the S&P Emini & Currency Futures with Uncle Mike 8/12/09 Posted by: unclemiketrader
Video duration: 208 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
 |
Day Trading the S&P Emini Futures & Currency Futures with Uncle Mike 8/10/09 Posted by: unclemiketrader
Video duration: 265 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
 |
Day Trading the S&P Emini and Currency Futures with Uncle Mike 8/6/09 Posted by: unclemiketrader
Video duration: 233 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
 |
daytrading080409 Posted by: unclemiketrader
Video duration: 187 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrad e.com Yours in Trading, Uncle Mi |
 |
Day Trading the S&P Emini & Currency Futures with Uncle Mike 7/30/09 Posted by: unclemiketrader
Video duration: 293 seconds Trade for a living based upon risk/reward trades and proper money management. Uncle Mike will teach you trend, countertrend and breakout trading for the S&P E mini and Forex currency futures. Get Uncle Mikes Trade Assistant and Join the day trading room. Visit my site for details and follow my Blog at www.teachtalktrade.c om Yours in Trading, Uncle Mike |
