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    Trading Using The Moving Averages

    Uploaded by

    Richard Ndahani
    This document provides strategies for trading currencies using moving averages. It outlines the following steps: 1. Plot a 5-period, 20-period, and 50-period exponential moving average on a 15-minute chart. 2. Buy when the 5-period EMA crosses above the 20-period EMA and all are above the 50-period EMA. Sell when the 5-period EMA crosses below the 20-period EMA and both are below the 50-period EMA. 3. Use moving average envelopes by setting percentage bands above and below a moving average to identify trading opportunities when the price approaches the moving average band.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Trading Using The Moving Averages

    Uploaded by

    Richard Ndahani
    141 views8 pages
    This document provides strategies for trading currencies using moving averages. It outlines the following steps: 1. Plot a 5-period, 20-period, and 50-period exponential moving average on a 15-minute chart. 2. Buy when the 5-period EMA crosses above the 20-period EMA and all are above the 50-period EMA. Sell when the 5-period EMA crosses below the 20-period EMA and both are below the 50-period EMA. 3. Use moving average envelopes by setting percentage bands above and below a moving average to identify trading opportunities when the price approaches the moving average band.

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    TRADING USING THE MOVING AVERAGES.pptx

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    This document provides strategies for trading currencies using moving averages. It outlines the following steps: 1. Plot a 5-period, 20-period, and 50-period exponential moving average on a 15-minute chart. 2. Buy when the 5-period EMA crosses above the 20-period EMA and all are above the 50-period EMA. Sell when the 5-period EMA crosses below the 20-period EMA and both are below the 50-period EMA. 3. Use moving average envelopes by setting percentage bands above and below a moving average to identify trading opportunities when the price approaches the moving average band.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    141 views8 pages

    Trading Using The Moving Averages

    Uploaded by

    Richard Ndahani
    This document provides strategies for trading currencies using moving averages. It outlines the following steps: 1. Plot a 5-period, 20-period, and 50-period exponential moving average on a 15-minute chart. 2. Buy when the 5-period EMA crosses above the 20-period EMA and all are above the 50-period EMA. Sell when the 5-period EMA crosses below the 20-period EMA and both are below the 50-period EMA. 3. Use moving average envelopes by setting percentage bands above and below a moving average to identify trading opportunities when the price approaches the moving average band.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 8
    At a glance
    Powered by AI
    The key takeaways are that moving averages can be used to develop trading strategies by using crossovers of short term moving averages with long term moving averages as buy and sell signals, and that exponential moving averages respond more quickly to price changes than simple moving averages.

    The steps are to plot a 5 period, 20 period and 50 period EMA on a 15 minute chart, buy when the 5 period crosses above the 20 period and all are above the 50 period, sell when the 5 period crosses below the 20 period and all are below the 50 period, place initial stop loss below the 20 period EMA for buys or 10 pips from entry for sells.

    Optional steps include moving the stop loss to break even once the trade is 10 pips profitable and taking profits at 20 pips or when the 5 period EMA crosses below/above the 20 period for long/short positions respectively.

    TRADING USING THE

    MOVING AVERAGES
    BY MAREGESI
    MOVING AVERAGES-OOH dear this are coloured lines as we discussed last time ouk lets see
    Here are the strategy steps.
    • Plot three exponential moving averages—a five-period EMA, a 20-period EMA, and 50-period EMA—on a 15-minute
    chart.
    • Buy when the five-period EMA crosses from below to above the 20-period EMA, and the price, five, and 20-period EMAs
    are above the 50 EMA.
    • For a sell trade, sell when the five-period EMA crosses from above to below the 20-period EMA, and both EMAs and the
    price are below the 50-period EMA.
    • Place oving Average Trading Strategy
    • This moving average trading strategy uses the EMA, because this type of average is designed to respond quickly to price
    cthe initial stop-loss order below the 20-period EMA (for a buy trade), or alternatively about 10 pips from the entry
    price.
    • An optional step is to move the stop-loss to break even when the trade is 10 pips profitable.
    • Consider placing a profit target of 20 pips, or alternatively exit when the five-period falls below the 20-
    period if long, or when the five moves above the 20 when short.
    . Forex traders often use a short-term MA crossover of a long-term MA as the basis for a trading strategy.
    Play with different MA lengths or time frames to see which works best for you.
    Moving Average Envelopes Trading Strategy
    • Moving average envelopes are percentage-based envelopes set above and below a moving average. The
    type of moving average that is set as the basis for the envelopes does not matter, so forex traders can
    use either a simple, exponential or weighted MA.
    Forex traders should test out different percentages, time intervals, and currency pairs to understand how
    they can best employ an envelope strategy. It is most common to see envelopes over 10- to 100-day
    periods and using "bands" that have a distance from the moving average of between 1-10% for daily
    charts.
    • If day trading, the envelopes will often be much less than 1%. On the one-minute chart below, the MA
    length is 20 and the envelopes are 0.05%. Settings, especially the percentage, may need to be changed
    from day to day depending on volatility. Use settings that align the strategy below to the price action of
    the day.
    • Ideally, trade only when there is a strong overall directional bias to the price. Then, most traders only
    trade in that direction. If the price is in an uptrend, consider buying once the price approaches the
    middle-band (MA) and then starts to rally off of it. In a strong downtrend, considering shorting when
    the price approaches the middle-band and then starts to drop away from it.

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