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:
 |
Adding Title In Proshow Posted by: CnTEnterprises
Video duration: 78 seconds How to add a title box at bottom of video in Proshow Producer. |
 |
Freedom Forex Formula Review Posted by: CnTEnterprises
Video duration: 125 seconds http://www.urhomemon eymakers.com Yours FREE...The Freedom Forex Formula that shows you how to make 7913 PIPS in less than 15 minutes time. Look over the shoulder of traders and watch them make a killing in the forex market. |
 |
The Forex Miracle System Posted by: CnTEnterprises
Video duration: 76 seconds http://www.forexambu sh20.com/Miracle/ Take advantage of the loophole in the Foreign Exchange Currency market or Forex that a professional has found to make returns of %400 on most trades. The Forex Miracle System is a professional way for the average person to trade Forex from home. |
 |
Review of Forex Ambush 2.0 Trade Signal Artificial Intelligence Posted by: CnTEnterprises
Video duration: 146 seconds http://www.forexambu sh20.com Review of Forex Ambush 2.0, the forex trade signal artificial intelligence. AI trading that allows you to only trade when ForexAmbush tells you is the best time to trade currency. |
 |
Super Affiliate Blogger Bonus Posted by: CnTEnterprises
Video duration: 90 seconds http://superaffiliat ebloggerreview.wordp ress.com Niche Blog Affiliate Profits is just one bonus that is given when you get Super Affiliate Blogger from my website. Instant Cash Bootcamp is another bonus that can be yours if you check out my Super Affiliate Blogger Review and Bonus. |
 |
Turbo Big Bang Ultimate Bonus Posted by: CnTEnterprises
Video duration: 107 seconds http://www.urhomemon eymakers.com/TBBB/ The Best and Baddest Bonus for Turbo Big Bang can be found by following the link above. John Delavera's Turbo Big Bang is the ultimate product to jump start your online business. |
 |
Forex Power Trading Secrets and Strategies Posted by: CnTEnterprises
Video duration: 100 seconds http://www.urhomemon eymaker.com Review of the Forex Power Strategy Trading Course that is being released Friday, February 22. As a student of the Forex Power Strategy Course, I can tell you that this is a top-notch video course that leaves no stone(trade) unturned. You will learn from a master Forex trader as he teaches from the basics to advanced methods for trading on the foreign exchange. |
 |
#1 Search Engine Ranking Posted by: CnTEnterprises
Video duration: 68 seconds http://www.urhomemon eymakers.com/SearchE ngineSubmission/ Submit your site to 40 search engines and get number one ranking for five keywords. New search engine submission service guarantees a top search engine ranking. |
