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:
 |
Learn To Trade Forex Fakey Trading Setup Posted by: OzTrader
Video duration: 587 seconds More free videos from Nial Fuller http://www.LearnToTr adeTheMarket.com |
 |
Exit Signals on EURUSD Posted by: OzTrader
Video duration: 105 seconds Forex Price Action Videos- http://www.learntotr adethemarket.com |
 |
Trading With Weekly Anchor Charts in Forex - Price Action Posted by: OzTrader
Video duration: 364 seconds More Forex Videos Here - http://www.learntotr adethemarket.com/tra ding-videos/trading- price-action-reversa ls-on-weekly-anchor- forex-charts/ |
 |
Set and Forget Forex Trading Strategy Using Price Action Posted by: OzTrader
Video duration: 297 seconds More Free Price Action Forex Videos Here - http://www.learntotr adethemarket.com/cat egory/trading-videos / Set and Forget Forex Trading - http://www.learntotr adethemarket.com/tra ding-videos/set-and- forget-forex-trading -strategy-video-1/ |
 |
Forex Training Tutorial on Pin Bar Strategy Posted by: OzTrader
Video duration: 313 seconds Forex Training on Price Action http://www.LearnToTr adeTheMarket.com Twitter http://www.twitter.c om/NialFuller Facebook http://www.facebook. com/NiaFuller |
 |
Drawing Support and Resistance on Forex Chart - Tutorial Video Posted by: OzTrader
Video duration: 309 seconds Forex Training Tutorial Videos - http://www.learntotr adethemarket.com Nial Fuller on Twitter - http://twitter.com/N ialFuller Nial Fuller on Facebook - http://www.facebook. com/nialfuller |
 |
Forex Strategy - Inside Bar Entry Setup Posted by: OzTrader
Video duration: 173 seconds Get Forex Training http://www.learntotr adethemarket.com ................. .................... .................... ... A great Place to Find out what shares to buy is http://www.sharestob uy.com.au/ |
 |
Forex Strategy - Nial Fuller Price Action Strategies Posted by: OzTrader
Video duration: 394 seconds Nial Fuller's Price Action Training - http://www.learntotr adethemarket.com Get Free Forex Trading Training Video Tutorials |
 |
Price Action Forex Trading Strategies Tutorial Posted by: OzTrader
Video duration: 431 seconds For More Price Action Forex Trading Strategies Video Tutorials Visit http://www.learntotr adethemarket.com/cat egory/trading-videos / |
 |
Forex Training - Price Action Posted by: OzTrader
Video duration: 240 seconds Forex Training here http://www.learntotr adethemarket.com/tra ding-videos/forex-pr ice-action-trading-s trategies-video/ |
 |
Price Action Strategies - Forex Trading Posted by: OzTrader
Video duration: 306 seconds Price Action http://www.learntotr adethemarket.com |
 |
More Bullish Pin Bar Signals For AUDJPY Posted by: OzTrader
Video duration: 111 seconds learn to trade forex training - http://www.learntotr adethemarket.com the best forex trading on the net. |
 |
Forex Price Action Signals - Inside Bar , Pin Bar Posted by: OzTrader
Video duration: 118 seconds Forex Price Action Strategies - http://www.learntotr adethemarket.com |
 |
how to trade forex price action trading Posted by: OzTrader
Video duration: 332 seconds how to trade forex price action trading http://www.learntotr adethemarket.com |
 |
Forex Training Posted by: OzTrader
Video duration: 30 seconds Forex Training, Forex Education visit - http://www.learntotr adethemarket.com We teach you how to trade the forex market successfully with our Forex Training Courses |
 |
Forex Training - Pin Bar Forex Trading Strategy Posted by: OzTrader
Video duration: 278 seconds Forex Training - Pin Bar Forex Trading Strategy - http://www.learntotr adethemarket.com |
 |
Trading reversal bars systems in forex Posted by: OzTrader
Video duration: 265 seconds Trading reversal bars systems in forex http://www.learntotr adethemarket.com |
 |
Develop a Trading Plan - Using Confluence Posted by: OzTrader
Video duration: 171 seconds Forex Trading - http://www.learntotr adethemarket.com , Develop a Trading Plan - Using Confluence and Price Action |
 |
How to trade the Pin Bar 50% retrace method Posted by: OzTrader
Video duration: 280 seconds learn to trade forex using the pin bar method - http://www.learntotr adethemarket.com |
 |
Strong Pin Bar Setups in Forex Posted by: OzTrader
Video duration: 181 seconds Strong Pin Bar Candle Setups in Forex http://www.learntotr adethemarket.com |
 |
Trading Pin Bar Method on GBPJPY Forex pair Posted by: OzTrader
Video duration: 227 seconds http://www.learntotr adethemarket.com Trading Pin Bar Method Forex |
 |
Trading False Break Pattern in Forex Posted by: OzTrader
Video duration: 246 seconds Forex Training http://www.learntotr adethemarket.com |
 |
My Last 3 Forex Fakey Trade Setups Posted by: OzTrader
Video duration: 533 seconds http://www.learntotr adethemarket.com - Forex Training |
 |
Inside bar Strategy Forex Posted by: OzTrader
Video duration: 310 seconds http://www.learntotr adethemarket.com - Inside bar Strategy Forex |
 |
Forex Trading - Support and Resistance with reversals Posted by: OzTrader
Video duration: 368 seconds http://www.learntotr adethemarket.com - Forex Trading Training |
