Forex Trend Trading With a Simple Moving Average

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:

Best Indicator For Daytrading Crude Oil Futures - Horst Trades CL & TF May 24, 2012 Best Indicator For Daytrading Crude Oil Futures - Horst Trades CL & TF May 24, 2012
Posted by: EMiniTutor

Video duration: 205 seconds

http://eminitutor.bl ogspot.com/ Learning Day Trading Basics - Trading Patterns taught in my Online 1 on 1 tutoring sessions. Horst Trades CL & TF May 24, 2012
Making Money Pivot Trading Crude Oil, & Russell 2000 - Horst Trades EMini\ Making Money Pivot Trading Crude Oil, & Russell 2000 - Horst Trades EMini's CL & TF May 23, 2012
Posted by: EMiniTutor

Video duration: 214 seconds

http://eminitutor.bl ogspot.com/ Learning Day Trading Basics - Trading Patterns taught in my Online 1 on 1 tutoring sessions. Horst Trades CL & TF May 23, 2012
Pivot Trading Gold, Crude Oil, & Russell 2000 For A Living - Horst Trades GC, CL & TF May 22, 2012 Pivot Trading Gold, Crude Oil, & Russell 2000 For A Living - Horst Trades GC, CL & TF May 22, 2012
Posted by: EMiniTutor

Video duration: 330 seconds

http://eminitutor.bl ogspot.com/ Learning Day Trading Basics - Trading Patterns taught in my Online 1 on 1 tutoring sessions. Horst Trades GC, CL & TF May 22, 2012
Day Trading Techniques That Work l Emini Tutor - Horst Trades EMini Gold May 21, 2012 Day Trading Techniques That Work l Emini Tutor - Horst Trades EMini Gold May 21, 2012
Posted by: EMiniTutor

Video duration: 235 seconds

http://eminitutor.bl ogspot.com/ Learning Day Trading Basics - Trading Patterns taught in my Online 1 on 1 tutoring sessions. Horst Trades GC May 21, 2012
Online Guide To Emini Day Trading l Emini Tutor - Horst Trades EMini CL May 17, 2012 Online Guide To Emini Day Trading l Emini Tutor - Horst Trades EMini CL May 17, 2012
Posted by: EMiniTutor

Video duration: 320 seconds

http://eminitutor.bl ogspot.com/ Learning Day Trading Basics - Trading Patterns taught in my Online 1 on 1 tutoring sessions. Horst Trades CL May 17, 2012
Online Day Trading Video Tutorials | EMini Tutor - Horst Trades TF & CL May 16, 2012 Online Day Trading Video Tutorials | EMini Tutor - Horst Trades TF & CL May 16, 2012
Posted by: EMiniTutor

Video duration: 177 seconds

http://eminitutor.bl ogspot.com/ Learning Day Trading Basics - Trading Patterns taught in my Online 1 on 1 tutoring sessions. Horst Trades TF & CL May 16, 2012
Guide To Daytrading Tutorials - Emini Tutor - Horst Trades CL May 15, 2012 Guide To Daytrading Tutorials - Emini Tutor - Horst Trades CL May 15, 2012
Posted by: EMiniTutor

Video duration: 364 seconds

http://eminitutor.bl ogspot.com/ Learning Day Trading Pivot Point Basics - Trading Patterns taught in my Online 1 on 1 tutoring sessions. Horst Trades CL May 15, 2012
Daytrading Fibonacci Tutorials - Emini Tutor - Horst Trades TF May 14, 2012 Daytrading Fibonacci Tutorials - Emini Tutor - Horst Trades TF May 14, 2012
Posted by: EMiniTutor

Video duration: 92 seconds

http://eminitutor.bl ogspot.com/ Daytrading Fibonacci Tutorial - Trading Patterns taught in my Online 1 on 1 tutoring sessions. Horst Trades TF May 14, 2012
Learning Day Trading Basics - Emini Tutor - Horst Trades TF May 11, 2012 Learning Day Trading Basics - Emini Tutor - Horst Trades TF May 11, 2012
Posted by: EMiniTutor

Video duration: 98 seconds

http://eminitutor.bl ogspot.com/ Learning Day Trading Basics - Trading Patterns taught in my Online 1 on 1 tutoring sessions. Horst Trades TF May 11, 2012
Emini Day Trading Tips, Tricks, Strategies - Horst Trades EMini TF May 10, 2012 Emini Day Trading Tips, Tricks, Strategies - Horst Trades EMini TF May 10, 2012
Posted by: EMiniTutor

Video duration: 262 seconds

http://eminitutor.bl ogspot.com/ Predictable Emini Futures Trend Trading Patterns taught in my Online 1 on 1 tutoring sessions. Horst Trades TF May 10, 2012
A Beginner\ A Beginner's Guide To Online Day Trading - Horst Trades EMini TF May 09, 2012
Posted by: EMiniTutor

Video duration: 132 seconds

http://eminitutor.bl ogspot.com/ Predictable Emini Futures Trend and Pivot Trading Patterns taught in my Online 1 on 1 tutoring sessions. Horst Trades TF May 09, 2012
Fibonacci Trading Levels And Strategies - Horst Trades EMini TF May 08, 2012 Fibonacci Trading Levels And Strategies - Horst Trades EMini TF May 08, 2012
Posted by: EMiniTutor

Video duration: 345 seconds

http://eminitutor.bl ogspot.com/ Predictable Emini Futures Trend Trading Patterns taught in my Online 1 on 1 tutoring sessions. Horst Trades TF May 08, 2012
Daytrading EMini Futures With Tick Charts - Horst Trades TF May 07, 2012 Daytrading EMini Futures With Tick Charts - Horst Trades TF May 07, 2012
Posted by: EMiniTutor

Video duration: 294 seconds

http://eminitutor.bl ogspot.com/ Predictable Emini Futures Trend Trading Patterns taught in my Online 1 on 1 tutoring sessions. Horst Trades TF May 07, 2012
Trading Common Predictable Emini Trending Patterns -Horst Trades EMini TF May 04, 2012 Trading Common Predictable Emini Trending Patterns -Horst Trades EMini TF May 04, 2012
Posted by: EMiniTutor

Video duration: 228 seconds

http://eminitutor.bl ogspot.com/ Common Predictable Emini Futures Trend Trading Patterns taught in my Online 1 on 1 tutoring sessions. Horst Trades TF May 04, 2012
Predictable Emini Patterns And Targets - Horst Trades EMini TF May 03, 2012 Predictable Emini Patterns And Targets - Horst Trades EMini TF May 03, 2012
Posted by: EMiniTutor

Video duration: 341 seconds

http://eminitutor.bl ogspot.com/ Anticipating Targets With Predictable Emini Patterns taught in my 1 on 1 tutoring sessions. Horst Trades EMini TF May 03, 2012
Trading Predictable Emini Pivot Patterns - EMini Tutor - Horst Trades EMini TF May 02, 2012 Trading Predictable Emini Pivot Patterns - EMini Tutor - Horst Trades EMini TF May 02, 2012
Posted by: EMiniTutor

Video duration: 348 seconds

http://eminitutor.bl ogspot.com/ Emini Pivot Trading Patterns revealed in my 1 on 1 tutoring sessions. Horst Trades EMini TF May 02, 2012
Predictable Emini Patterns For Trend Trading - EMini Tutor - Horst Trades EMini TF May 01, 2012 Predictable Emini Patterns For Trend Trading - EMini Tutor - Horst Trades EMini TF May 01, 2012
Posted by: EMiniTutor

Video duration: 267 seconds

http://eminitutor.bl ogspot.com/ Emini Trend Trading Patterns revealed in my 1 on 1 tutoring sessions. Horst Trades EMini TF May 01, 2012
Trend Trading Signals For EMini Trading - EMini Tutor - Horst Trades EMini TF April 30, 2012 Trend Trading Signals For EMini Trading - EMini Tutor - Horst Trades EMini TF April 30, 2012
Posted by: EMiniTutor

Video duration: 189 seconds

http://eminitutor.bl ogspot.com/ Basic Signals For Emini Trend Trading revealed in my 1 on 1 tutoring sessions. Horst Trades EMini TF April 30, 2012
EMini Day Trading Futures Course _Horst Trades TF EMini April 20, 2012 EMini Day Trading Futures Course _Horst Trades TF EMini April 20, 2012
Posted by: EMiniTutor

Video duration: 221 seconds

http://eminitutor.bl ogspot.com/ Register For 1 On 1 Training _Horst Trades TF EMini April 20, 2012 Trading secrets revealed in my 1 on 1 tutoring sessions. Learn How to anticipate the markets next move with it's repetitive systematic movements..
Learning EMini Trading Strategies _Horst Trades TF& GC EMini April 18, 2012 Learning EMini Trading Strategies _Horst Trades TF& GC EMini April 18, 2012
Posted by: EMiniTutor

Video duration: 454 seconds

http://eminitutor.bl ogspot.com/ Register For 1 On 1 Training _Horst Trades TF& GC EMini April 18, 2012 Learn How to anticipate the markets next move.
Online EMini Trading Course _Horst Trades TF EMini April 13, 2012 Online EMini Trading Course _Horst Trades TF EMini April 13, 2012
Posted by: EMiniTutor

Video duration: 332 seconds

http://eminitutor.bl ogspot.com/ Register For 1 On 1 Training _Horst Trades TF EMini April 13, 2012 Knowing The Markets Next Move Is Rewarding. Learn How to anticipate the markets next move.
Learn EMini Trading Secrets - Horst Trades TF EMini April 12, 2012 Learn EMini Trading Secrets - Horst Trades TF EMini April 12, 2012
Posted by: EMiniTutor

Video duration: 383 seconds

http://eminitutor.bl ogspot.com/ Register For 1 On 1 Training _Horst Trades TF EMini April 12, 2012 Learn How to anticipate the markets next move.
EMini Trading Education - Horst Trades TF EMini April 10, 2012 EMini Trading Education - Horst Trades TF EMini April 10, 2012
Posted by: EMiniTutor

Video duration: 390 seconds

http://eminitutor.bl ogspot.com/ Register For 1 On 1 Training _Horst Trades TF EMini April 10, 2012
Learning EMini Day Trading Techniques - Horst Trades TF EMini April 09, 2012 Learning EMini Day Trading Techniques - Horst Trades TF EMini April 09, 2012
Posted by: EMiniTutor

Video duration: 117 seconds

http://eminitutor.bl ogspot.com/ Register For 1 On 1 Training _Horst Trades TF EMini April 09, 2012. Trading is not something that requires luck. Either you know what you are doing or you don't. 90% of traders lose money. If you aren't CONSISTENTLY profitable on a daily basis you need to ask yourself why.
Tips On EMini Futures Trading Strategies - Horst Trades TF EMini April 05, 2012 Tips On EMini Futures Trading Strategies - Horst Trades TF EMini April 05, 2012
Posted by: EMiniTutor

Video duration: 156 seconds

http://eminitutor.bl ogspot.com/ Register For 1 On 1 Training _Horst Trades TF EMini April 05, 2012. Trading Emini Futures is not something that requires luck. Either you know what you are doing or you don't. 90% of traders lose money. Thanks in advance if you fall into that category. If you aren't CONSISTENTLY profitable on a daily basis you need to ask yourself why.