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:
 |
http://pwnboxer.com/ ?link=mdcbgs - This is as close as you can ... Posted by: markeedragon
Video duration: 328 seconds http://pwnboxer.com/ ?link=mdcbgs - This is as close as you can get to botting without crossing the line. |
 |
How to get a DSLR Camera Cheap - Starter Photography Posted by: markeedragon
Video duration: 1417 seconds http://www.amazon.co m/mn/search/?_encodi ng=UTF8&scn=502394&r edirect=true&keyword s=dslr%20cameras&tag =mdyoutubegeneral-20 &linkCode=ur2&qid=13 36863884&h=74c693a8a c3a071f3128fbc672825 abf8bdc963f&camp=178 9&creative=390957&rh =n%3A502394%2Ck%3Ads lr%20cameras How I figured out what DSLR to buy and why. |
 |
Bhaloidam the game! Interview with Corvus Elrod Posted by: markeedragon
Video duration: 1877 seconds http://zakelro.com/b haloidam/ Check out the game here. |
 |
Free Nexuiz FPS Beta Keys (While they last!) Posted by: markeedragon
Video duration: 154 seconds http://www.markeedra gon.com/index.php?ex p=&cat=18&shop=1 Get your free beta key right now. Don't wait though as we only have 200 of them and they will go quickly! |
 |
Dreams are Great. But Action is Required to Realize Them. Posted by: markeedragon
Video duration: 1163 seconds My goal right now is to buy a new motorcycle. Selling my stuff http://www.ebay.com/ itm/150803655528 to get to that goal. I actually went broke again. So now I'm starting over again. WTFast http://www.wtfast.co m/promote.aspx?APID= 35 One person who comments will win a free advanced code. :) |
 |
Tera Launched! Game Play Video Posted by: markeedragon
Video duration: 158 seconds http://www.markeedra gon.com/affiliate.ph p?id=4&redirect=inde x.php?cat=11 Tera Chronoscrolls, Gametime and New Accounts. Markee Dragon is an official Tera - En Masse reseller Tera launched today. Do you have your copy? Markee Dragon is an official reseller. Get your standard or deluxe CD key right now. |
 |
WTFast Free Advanced Key Giveaway (Cures Game Lag) Posted by: markeedragon
Video duration: 360 seconds http://www.wtfast.co m/promote.aspx?APID= 35 You need an account to take advantage of this key we are giving away. Don't worry though. If you miss this one we have a bunch more to give away! |
 |
Samsung Galaxy S II Review: What an Awesome Phone (Galaxy S 2) Posted by: markeedragon
Video duration: 837 seconds http://www.amazon.co m/gp/product/B005LHN 47S/ref=as_li_ss_tl? ie=UTF8&tag=mdyoutub egeneral-20&linkCode =as2&camp=1789&creat ive=390957&creativeA SIN=B005LHN47S I'm testing this phone for the next 10 days. So far it's awesome. The screen on it is especially beautiful and the phone is fast! |
 |
Winner of Mass Effect 3 N7 Deluxe Code! Posted by: markeedragon
Video duration: 231 seconds https://www.youtube. com/user/TocanN We asked you to subscribe for a chance to win the code. The winner has been selected! Brian and I have become friends. He's been posting a lot of videos about Mass Effect 3 and I think he deserves a lot more views. :) |
 |
1080p Logitech Webcam Review (Shot with Webcam) Posted by: markeedragon
Video duration: 301 seconds http://www.amazon.co m/gp/product/B006JH8 T3S/ref=as_li_ss_tl? ie=UTF8&tag=mdyoutub egeneral-20&linkCode =as2&camp=1789&creat ive=390957&creativeA SIN=B006JH8T3S It's even cheaper than I remembered! It's under $100 and looking at it right now theyhave it on sale for $80 and free shipping if you are a prime member. |
 |
FREE Mass Effect 3 N7 Deluxe Code! (No Deqa) Posted by: markeedragon
Video duration: 378 seconds https://www.youtube. com/user/TocanN Subscribe to his channel and I'll give the key away to one of his subscribers tomorrow. Brian and I have become friends. He's been posting a lot of videos about Mass Effect 3 and I think he deserves a lot more views. :) |
 |
Announcing Markee Dragon Game Codes Posted by: markeedragon
Video duration: 170 seconds http://www.markeedra gon.com/affiliate.ph p?id=4 Check out my new company. |
 |
ShareCraft 2012 - Sponsored by Athene Posted by: markeedragon
Video duration: 339 seconds http://fundrazr.com/ challenges/campaigns /82ie1 I encourage you to donate to this good cause |
 |
My Video Game Cat Posted by: markeedragon
Video duration: 401 seconds How far have you taken your gaming into real life? Far enough to name a pet after a video game character? |
 |
Losing $500,000 in Limo Services Posted by: markeedragon
Video duration: 689 seconds http://www.twowar.co m/link.asp?id=35511 Try Blackshot Europe for free. It's a free to play game! As was asked for. Here is the video talking about the half million dollars I lost when attempting to start a limo service. |
 |
How Does Community last in MMOs? Stickiness Explained. Posted by: markeedragon
Video duration: 731 seconds Derium's CCGs is located in Cuyahoga Falls Ohio. The facebook page is http://www.Facebook. com/DeriumsCCGs . Visit them and tell them thank you for the free codes! Also included. The future of communities in mmos. |
 |
I Lost $250,000 in one day! Posted by: markeedragon
Video duration: 714 seconds Yes it's true. Yes this was a big failure but I'll share it with you anyway. :) |
