Daily Trading Advice

  • R1:1.2803 | R2:1.2880 | R3:1.3095

    S1:1.2707 | S2:1.2609 | S3:1.2510

    Sell @ 1.707 TP: 1.2803 SL: -

    EURUSD Strategy
    May 11th
     

     

  • R1:1.4886 | R2:1.4958 | R3:1.5054

    S1:1.4764 | S2:1.4680 | S3:1.4645

    Sell @ 1.4764 TP: 1.471 SL: 1.450

    GBPUSD Strategy
    May 11th
     

     

  • R1:93.57 | R2:94.03 | R3:95.00

    S1:91.64 | S2:90.83 | S3:89.90

    Sell @ 92.70 TP: 91.65 SL: 93.27

    USDJPY Strategy
    May 11th
     

     

Central Bank rates

USD 0.25% JPY 0.10%
EUR 1.00% CHF 0.25%
GBP 0.50% CAD 0.25%
AUD 3.75% NZD 2.50%

Moving Average - MA

The best way to use moving averages for a chart analysis in to combine two moving averages and read not only the crossing signals but where both Moving Average are standing comparing to the current price.

First Moving Average: Simple, 10 Periods.

Second Moving Average: Simple, 20 Periods.

Timeframe: Read the article on timeframes.

Signals:

1. If both moving averages are below the price, then this is a signal that the market is about to fall.

2. If both moving averages are above the price, then this is a signal that the market is about to rise.

3. If the last candle closes between the two moving averages, then the previous one is to be checked to see whether the market is going up or down.

4. The crossing of the 10 and 20 simple moving averages are used as a confirmation when you have already entered the market.

On the below image we can clearly see that the last candle, although bearish is above both Moving Averages, hence market is not likely to fall, but to rise instead. Notice that there are a lot of false signals here, but still the odds will be in your favor if you interpret the market that way. Moreover, there is a crossing we can notice on Feb 25 at 14:00 that would comfort us if we were long at this time.

alt

Filter:

If the two moving averages cross each other more than once over a range of 5 bars then avoid the market because this would be an indication that we are about to face a range.

alt

The chart above displays two moving averages crossing each other numerously during a small lapse of time. If this happens stay away of the market if you are a trend follower.

There is no point looking at past values when analyzing the moving average, check only the last closed bar the current one is still not printed. However if you spot a crossing that occured on the last 5 bars then it should be taken into account as a signal filter or a signal confirmation.

There are dozens of interpretations of moving averages, such as using them as moving resistances and support, or adding a dozen of them and looking at the shape of the wave they create while following the price, but the most efficient and simple way to use them is as it is described above.