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:
 |
Forex News Trading Academy Testimonials Posted by: henryliuforex
Video duration: 864 seconds A compilation of customer testimonials through out the past 5 years. |
 |
Market Cycle Forex Trading - Timing Matters Posted by: henryliuforex
Video duration: 312 seconds One of my live Mastermind Mentoring traderoom trades on market cycle timing. We looked at today's market, saw an opportunity to go short on EURUSD, and we waited for the best possible moment and picked up good amount of pips. |
 |
Forex Spike Trading - Live News Trading Video Posted by: henryliuforex
Video duration: 411 seconds This is a spike trading video taken from my Mastermind Mentoring Traderoom where we made over 30+ pips in just a few minutes, despite of slippage, widened spread, requotes, etc... The key is to pick the right release to trade and contrary to popular believe, you can't trade every single release in using spike trading method. |
 |
Forex News Trading - Retracement / Fundamental Analysis Trading Posted by: henryliuforex
Video duration: 557 seconds This is another live video taken from my Mastermind Mentoring traderoom. We got softer than expected CPI release from UK but market failed to move significantly immediately. But because of understanding of the fundamental nature of the news, we were sure that the market should be leaning towards a drop, therefore we jumped in this trade and ended up with lots of profit. |
 |
Support & Resistance Forex Trading - Taking advantage of both Technical and Fundamental Posted by: henryliuforex
Video duration: 221 seconds Support and Resistance trading is another trading methodology that I do in my Mastermind Mentoring Program. In this video I showed how to take advantage of technical levels and enter the market based on long term fundamental bias. |
 |
FOREX TRADING - FOMC Live (+60 Pips) Posted by: henryliuforex
Video duration: 431 seconds Economic news affects the Forex market and you can take advantage of these releases and turn them into personal gains. This whole trade took less than 20 minutes and probably the easiest pips to make... if you know what you are doing... |
 |
Live Forex News Trading & Training - Canada Retail Sales Posted by: henryliuforex
Video duration: 554 seconds In this video I'll show you to the trade after news release and have the confidence of staying in a trade knowing the fundamental analysis of a news release will eventually workout to your favor. |
 |
Live Forex News Trading Example - UK Retail Sales Posted by: henryliuforex
Video duration: 311 seconds Live Forex News Trading video from my account on UK Retail Sales where we saw a stronger than expected release which not only worked out immediately but the long-term implication of this release changed recent market trend. Traders that learn to take advantage of this release will always stay on the right side of the market. |
 |
Forex News Trading - Trade The Retracement On Nonfarm Payroll - Jan. 8, 2010 Posted by: henryliuforex
Video duration: 577 seconds Forex Trading live video on US Nonfarm Payroll January 8 2010 (01/08/10). Watch how I analyze the currency market prior to the release and how I issue trading signals that resulted in 80 pips of gain in less than 30 minutes after the Non-Farm Payroll Employment news. This is a typical textbook Retracement Forex trade and I teach in my currency trading mastermind mentoring class. |
 |
Forex News Trade Analysis - Insight video part 2 of 2 Posted by: henryliuforex
Video duration: 600 seconds Forex market insight video over the fundamental principles of the currency market, including market timing, support and resistance, fundamental news, market perception, and much more. This video shares some of the most guarded principle of my Newsprofiteer trading system - part 1 of 2 |
 |
Forex News Trade Analysis - Insight video part 1 of 2 Posted by: henryliuforex
Video duration: 500 seconds Forex market insight video over the fundamental principles of the currency market, including market timing, support and resistance, fundamental news, market perception, and much more. This video shares some of the most guarded principle of my Newsprofiteer trading system - part 1 of 2 |
 |
NFP Nonfarm Payroll Live Forex Trade Posted by: henryliuforex
Video duration: 600 seconds Live trade recording on the March 5, 2010 NFP Nonfarm Payroll Employment Changes, watch as I go over the trade while explaining how my Forex Trade Room (New Analysis Room) works. This trade resulted in 30+ pips of gain on 50% and over 150 pips on the remainder half by the end of day on Friday... |
 |
Forex Trading Training - UK GDP Posted by: henryliuforex
Video duration: 530 seconds Forex Trading Training live session with me, Henry Liu. As part of my mastermind mentoring program, I teach by example and show traders how-to analyze live currency market condition. Trading and analyzing real-time market data is the only way to learn, and as soon as you understand the reasons behind a trade and see it working out, you'll develop confidence. |
 |
Forex Trading Training - Australia CPI Posted by: henryliuforex
Video duration: 595 seconds Forex Trading Training sessions recorded live in my traderoom, starting from pre-release market analysis, complete trading plan, to after release trading signal. The right way to learn how to trade is to watch a live trade in action. |
 |
Forex Trading Course - Canadian IVEY PMI 01/07/10 Posted by: henryliuforex
Video duration: 600 seconds Forex Trading Course Live Video - Watch as I explain how to do a classic Retracement Trading on Forex news release in real time with real market. Forex news trading is exceptionally predictable given the right training and almost any Forex trading could follow what I do in this video. |
 |
Foreign Exchange Trading How to Trade Nonfarm Payroll (NFP) Changes Posted by: henryliuforex
Video duration: 596 seconds Foreign Exchange Trading live video on US Nonfarm Payroll January 8 2010 (01/08/10). Watch how I analyze the currency market prior to the release and how I issue trading signals that resulted in 80 pips of gain in less than 30 minutes after the Non-Farm Payroll Employment news. This is a typical textbook Forex trade and I teach in my currency trading mastermind mentoring class. |
 |
Currency Meter | Currency Strength Meter | Forex Tool Posted by: henryliuforex
Video duration: 591 seconds Currency Meter analyzes 19 currency pairs instantly and gives you complete market analysis in less than 3 seconds. No need to scan charts and different timeframes to find out what is going on in the currency market. Fire up my currency meter with your MT4 platform and make your next Forex trade a highly successful one... |
 |
Forex day trading - Live US Retail Sales - Analysis & Tutorial Posted by: henryliuforex
Video duration: 600 seconds US Retail Sales makes up 2/3 of the US GDP. This is a strong release as I started my usual analysis 10 minutes before the release. Then I guided my traderoom on the direction of the market at the release, called a trade, and ended the day (Friday) positive as many traders picked up more than 30+ pips in less than 40 minutes. |
 |
Realtime Forex Trade - Live profit Forex trade caught on Camera... Posted by: henryliuforex
Video duration: 542 seconds UK Services Purchasing Manager's Index came out worse than expected, but by reading the context of the market along with my proprietart trading system, I decided to jump in on a reverse trade following the long term trend and we picked up good pips immediately. Full explanation of trade analysis included. |
