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:
 |
Resumen Semanal. Julio 18 - 23 / 2.011 Posted by: colombiaforex
Video duration: 887 seconds |
 |
Como Ganar Dinero Invirtiendo en Internet. Estrategias CFD & FOREX Posted by: colombiaforex
Video duration: 4288 seconds Como Ganar Dinero Invirtiendo en Internet |
![Entrenamiento \"Análisis de Inversiones y Estrategias de Trading\"](http://i.ytimg.com/vi/d-PXm2heecA/2.jpg "Entrenamiento \\"Análisis de Inversiones y Estrategias de Trading\\"") |
Entrenamiento "Análisis de Inversiones y Estrategias de Trading" Posted by: colombiaforex
Video duration: 1830 seconds Entrenamiento "Análisis de Inversiones y Estrategias de Trading" |
 |
Taller de estudio semanal. Junio 14 / 2011 Posted by: colombiaforex
Video duration: 2422 seconds Taller de estudio semanal. Junio 14 / 2011 |
 |
Taller de estudio semanal. Junio 06 / 2011 Posted by: colombiaforex
Video duration: 1516 seconds Taller de estudio semanal. Junio 06 / 2011 |
 |
Taller de estudio semanal. Mayo 31 / 2011 Posted by: colombiaforex
Video duration: 2369 seconds Taller de estudio semanal. Mayo 31 / 2011 |
 |
Utilizando Estrategias de Alto Rendimientos en Inversiones Electronicas Apalancadas Posted by: colombiaforex
Video duration: 1948 seconds Utilizando Estrategias de Alto Rendimientos en Inversiones Electronicas Apalancadas |
 |
Estretagia Altos Rendimientos Utilizando Apalancamiento Posted by: colombiaforex
Video duration: 1006 seconds Estretagia CFD Forex Indices commoditites Que es el apalancamiendo y como obtener altos rendimientos |
 |
Principales noticias Colombia - BVC - Colpatria - TLC Colombia - Ecopetrol Posted by: colombiaforex
Video duration: 336 seconds http://tradeando.tv/ Fuerte caída del Índice General de la BVC Ecopetrol hará su segunda emisión en el mercado entre abril y mayo Colpatria emitiría acciones para recompra. Solicitaron a la administración de Obama que gestione el TLC con Colombia y Panamá |
 |
Terremoto, tsunami e incendio en Japón - Marzo 11 - 2.011 Posted by: colombiaforex
Video duration: 211 seconds Terremoto, tsunami e incendio en Japón - Marzo 11 - 2.011 http://tradeando. TV |
 |
Tradeando.TV - Marzo 10 - 2.011 Posted by: colombiaforex
Video duration: 970 seconds Tradeando.TV - Marzo 10 - 2.011 http://www.Tradea ndo.TV |
 |
Resumen Tradeando.TV - Marzo 09 - 2.011 Posted by: colombiaforex
Video duration: 955 seconds Resumen Tradeando.TV - Marzo 09 - 2.011 Versión Beta. http://tradeando. tv |
 |
Fundamentales Febrero 16 Posted by: colombiaforex
Video duration: 230 seconds |
 |
Febrero 15 - 2.010 Posted by: colombiaforex
Video duration: 348 seconds Febrero 15 - 2.010 - Captured Live on Ustream at http://www.ustream.t v/channel/tradeando |
 |
IMPULSO DE LA LIBRA FRENTE AL EURO Posted by: colombiaforex
Video duration: 197 seconds La moneda británica se ha apreciado hoy frente al euro antes de que se hicieran públicos los datos sobre la inflación del Reino Unido. |
 |
Resumen mercado de divisas. Febrero 11 - 2.011 Posted by: colombiaforex
Video duration: 387 seconds Resumen mercado de divisas. Febrero 11 - 2.011 - Captured Live on Ustream at http://www.ustream.t v/channel/tradeando |
 |
Fuerte caida del euro Posted by: colombiaforex
Video duration: 71 seconds Fuerte caida del euro |
 |
Tradeando.Tv Resumen Febrero 07 / 2.011 Posted by: colombiaforex
Video duration: 540 seconds Tradeando.Tv Resumen Febrero 07 / 2.011 |
 |
Tradeando.tv Febrero 07 / 2.011 Posted by: colombiaforex
Video duration: 539 seconds Tradeando on-line. Febrero 07 / 2.011 - Captured Live on Ustream at http://www.ustream.t v/channel/tradeando |
 |
Tradeando.Tv Febrero 03 / 2011 Posted by: colombiaforex
Video duration: 576 seconds Tradeando.Tv Febrero 03 / 2011 - Captured Live on Ustream at http://www.ustream.t v/channel/tradeando |
 |
Bull vs. Bear Tradeando.Com Posted by: colombiaforex
Video duration: 239 seconds Bull vs. Bear Tradeando.Com - Captured Live on Ustream at http://www.ustream.t v/channel/tradeando |
 |
Tradeando on line Posted by: colombiaforex
Video duration: 237 seconds Tradeando on line - Captured Live on Ustream at http://www.ustream.t v/channel/tradeando |
 |
Mercado de divisas. Enero 19 - 2.011 Posted by: colombiaforex
Video duration: 428 seconds Mercado de divisas. Enero 19 - 2.011 - Captured Live on Ustream at http://www.ustream.t v/channel/tradeando |
 |
Tradeando on-line. Enero 12 - 2.011 Posted by: colombiaforex
Video duration: 636 seconds Tradeando on-line. Enero 12 - 2.011 - Captured Live on Ustream at http://www.ustream.t v/channel/tradeando |
 |
Mercado Forex. Noviembre 17 / 2.010 Posted by: colombiaforex
Video duration: 356 seconds Mercado Forex. Noviembre 17 / 2.010 - Captured Live on Ustream at http://www.ustream.t v/channel/tradeando- tv |
