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:
 |
Internet Kill Switch Posted by: alleycatnews
Video duration: 107 seconds http://www.InternetK illSwitch.net Don't like the US kill the internet |
 |
Gold Futures Posted by: alleycatnews
Video duration: 301 seconds Gold Futures http://www.MyEztr ader.com Better way to trade gold |
 |
Trading Binary Options Posted by: alleycatnews
Video duration: 443 seconds http://www.TradingBi naryOptions.net Free Trading Binary Options System. Make 81% per winning trade with binary options I walk you thru it. |
 |
Free Trading System for Binary Options Posted by: alleycatnews
Video duration: 517 seconds http://www.myeztrade r.com use binary options to trade the nasdaq, forex, or stocks http://www.nasdaq profits.com Free trading system with 30 + years of historical stats on the nasdaq. Did you know there are some days that the nasdaq finishes UP over 80% of the time on that day. Wouldn't you want to know what days those are? |
 |
Forex Trading via Binary Options Posted by: alleycatnews
Video duration: 470 seconds http://www.MyEzTrade r.com Trade the Forex market with binary options make as much as 65% in 15 minutes! http://www.MyEztr ader.com binary options, binary trading, forex, forex trading, nadex, anyoption |
 |
Internet Marketing Cds Posted by: alleycatnews
Video duration: 342 seconds http://www.alleycatc oaching.com/movingsa le.html Internet marketing cds |
 |
Internet Marketing Blowout Sale Posted by: alleycatnews
Video duration: 582 seconds http://www.alleycatc oaching.com/offer.ht ml Check out my offer you can't pass up. |
 |
Affiliate Funnel System Review Posted by: alleycatnews
Video duration: 317 seconds http://www.Affiliate FunnelSystemReview.c om Affiliate Funnel System review. Launching March 31st at noon eastern |
 |
Affiliate Funnel System Review Posted by: alleycatnews
Video duration: 351 seconds http://www.Affiliate FunnelSystemBonus.co m Affiliate funnel system is something every affiliate should have. Launch on March 31st. Get it but don't miss out on my killer bonuses |
 |
#1 Affiliate for the #1 clickbank Product Posted by: alleycatnews
Video duration: 353 seconds http://www.AlleyCatC oaching.com Open until March 25th. Alley Cat coaching |
 |
Marketclub forex trading results Posted by: alleycatnews
Video duration: 604 seconds http://www.TradeLike This.com Marketclub trading results from July-Dec 2008. Usd/cad and eur/usd |
 |
Gold Trading via MarketClub Posted by: alleycatnews
Video duration: 563 seconds http://www.TradeLike This.com Marketclub Gold futures trading for Oct-Dec 2008. $12,800 in profits. Check out the 30 day risk free offer |
 |
Alley Cat Coaching is Open Posted by: alleycatnews
Video duration: 212 seconds http://www.AlleyCatC oaching.com Alley Cat coaching program |
 |
Alley Cat Coaching Jan 5th Posted by: alleycatnews
Video duration: 318 seconds http://www.AlleyCatC oaching.com Coaching program opens on Jan 5th. Learn How I earn money each month. |
 |
Market Wizards Video FREE Posted by: alleycatnews
Video duration: 83 seconds http://www.NewMarket Wizards.NET Get a free 85 minute Jack Schwager video. Market Wizard insights. Jack talks about the supertraders he has interviewed for his books. Stock Market Wizards, New Market Wizards, and Market Wizards |
 |
Market Club Review Posted by: alleycatnews
Video duration: 418 seconds http://www.TradeLike This.com Market Club Review. A look inside of MarketClub |
 |
3 Forex Trades 500+ Pips Posted by: alleycatnews
Video duration: 287 seconds http://www.TradeLike This.com 3 forex trades HUGE winners! Take the 2 week free trial |
 |
MarketClub Works GREAT! Posted by: alleycatnews
Video duration: 70 seconds http://www.TradeLike This.com The Last trading system you will ever need! |
 |
Learn To Trade, Learn to Forex Trade, Learn to Stock Trade Posted by: alleycatnews
Video duration: 87 seconds http://www.Videos4Tr aders.com Learn to Trade, Learn to Trade Forex, Learn to Trade Stocks, Stops, Learn from the Pros Free Videos |
 |
Learn To Trade, Learn to Trade Forex, Learn to trade Stocks Posted by: alleycatnews
Video duration: 88 seconds http://www.Videos4Tr aders.com Learn to Trade, Learn to Trade Forex, Learn to Trade Stocks, Stops, Learn from the Pros Free Videos |
 |
sell trade on system Posted by: alleycatnews
Video duration: 272 seconds sell trade |
 |
Buy trade on system Posted by: alleycatnews
Video duration: 492 seconds buy trade on eur/chf |
 |
FREE Stock Analysis- Stock Analysis Free Posted by: alleycatnews
Video duration: 87 seconds http://www.WatchTheT rend.com Free Stock Analysis, Stock Analysis FREE, Analysis on any Stock for FREE, Know the Trend with Free Stock Analysis |
