The Day Moving Average is voted as the number one trading indicator by a forex magazine. Personally I find the day moving average as a very reliable and versatile forex indicator as it can perform quite a number of functions at the same time. In this post, I will be sharing with you the various ways you can use the MA and integrate it into your trading system. I usually plot Exponential Moving Average instead of the Simple Moving Average because I find the EMA to be more dynamic and responsive compared to the SMA.

Simple Guppy Multi Moving Average Forex System

Below are some of the ways you can make use of the EMA. If you have read my other blog post talking about the moving averagesyou will know that they can be used as a trend identifier.

Use the Magic Multiple Moving Average Forex Trading system | Udemy

All you need is to observe their slope and you will be able to tell the trend of the market. If you see the EMA sloping upward, you are in an uptrend and if you see the EMA sloping downward, you are in a downtrend. Even when you are in an uptrend, the trend can be described as quiet or strong.

There are basically 2 kinds of trending market. If you see the gradient of your EMA to be steeped, you are in a trending and volatile market. If you see the gradient of your EMA to be gentle, you are in a trending and quiet market. Out of so many different value of moving averages, the day moving average is the most significant.

If you take a look at your trading chart, you will find the market respecting it more than any other EMAs. Therefore it can be used as a strong support and resistance level. Some traders make use of the EMA to place their entry.

When the price moves above it, you can then enter your LONG trade. If the price moves below it, you can then enter your SHORT trade. Now that you know the power of the day moving average and how to use it in your trading, you can start to integrate it into your trading system and make money from it. Do note that the above strategy is a general strategy that has not been fine tuned. In order for you to trade with it, please fine it tune on a demo account.

If you do not know how to fine tune a forex strategyplease read the below. For those of you who are totally new to forex trading, I will suggest that you read through this blog post that I have written for beginners.

Forex Trading For Beginners. If you are interested to learn how I do my forex technical analysis, you can take a look at the post below. Forex Technical Analysis Tips. Would like to know the differences between exponential,smoothed and liner weighted moving averages. Can you tell me in details. How to avoid false signals?. The moving average trading strategy seems more effective for me on a 1 hour chart. However, I have one concern: Hi kelvin, again and again many thanks for your work.

When you use indicators on the higher time frame, there are lesser noise due to the slower moving action on those time frames which is why most people says that most indicators are more accurate on the higher time frame.

For me, the 15 minutes is still a very good time frame for indicators but 5 minutes will produce a lot of false signal due to the fast movement on that particular time frame.

The strategy works on all time frame, the time frame to use depends on the type of trader you are. What do u mean by type of trader you are. Some time I feel that now candle is moving averages forex system EMA and will go away but it money illusion in the stock market the modigliani-cohn hypothesis and goes in one direction,no reversal appears.

What I mean is whether you are a scalper who enter and exit your position within minutes or day trader who enter and exit your position within the same day or position trader who enter and exit your position in weeks.

There are time where thing do not go our way and you have to accept it. The number has now increased to something like days a year. Have you done any research to see if using aprox day moving average would work better to take into account seasonality. I did not do any research on the days moving average.

It will be great if you have any information to share with us here. This way if price shoots rapidly up through lets say the level, another resistance can often be met at level. This to be used mainly on 4-Hour, Daily or even Weekly charts. If your sitting on eggshells your most likely trading to big. You can have a trading method that give you an edge but can lose money if you cant trade as if you dont care or understand beta slippage.

HI, I liked your blog. I am a new trader losing money. Melhores corretoras forex 2013 would like some help. I would like to have a simple system to use national stock exchange of india ltd.

businessweek, something that works for you.

I read that you use the 15 min EMA to see the trend and then the 5 min chart to australian dollar price in pakistani rupees a trade.

I have a long trade which I took at 1. I have been sitting on egg shells with all the drops in the last 24 hours. If you are interested to find out more about the market analysis, you can take a look at this blog that I have setup especially to talk about my trading analysis.

My Forex Trading Signals Blog.

First forex cb all thank you for sharing your precious knowledge with us. I have a question. Which one should I choose? As for how to change the moving average to exponential, it depends on your platform. There are some platform that gives you the option when the stock market crashes SMA or EMA and there are some that just gives you moving average and you can go to the setting to change it to either exponential, weighted or simple.

As for the price, I use the default close setting. I usually use the 15 minutes chart to look for opportunity and then move down to 5 minutes for entry. It is available on your trading platform.

You just have to plot the moving average and then select the do you make money selling pure romance to be Thank you very much for your insight and advice.

You do not need to buy the EMA, you just need to go to the moving average indicator and then select period and select exponential. This indicator is just telling you the current trend of the market as well as showing you where is the resistance or support.

In order to trade, you may need other indicators like the forex MACD indicator or forex Stochastic indicator for entry. Price sometimes do whipsaw around the EMA in the 5 min chart causing much losses. When I buy, price closed below EMA. I exited with a loss and entered a sell. Price closed above EMA and I had to exit with another loss and bought again. Price this time went up a few pips and then closed below EMA.

Is there any way to prevent such losses? Should I continue to stick to the plan and sell hoping that price will move down and recoup all my losses?

I personally dont trade with the 5 minutes as I myself have this problem as what you have stated above. The reason of this problem is that the 5 minutes chart has too much noise due to the numerous candlestick formed. Therefore I suggest that you trade off the 15 min instead. Kelvin Hope you have a good time As you said to share our experience about EMA I would like to draw your attention for this MA from 28 till 30 March for EURUSD in H1.

You can have all the indicator aligned telling you to enter a trade but you can get stopped out and that is trading. What I meant by reliable is that the indicator works most of the time but not everytime. Hullo Kelvin, the EMA is more responsive for me. If you are leaving your position open, you need to slowly shift your stop loss to breakeven and eventually lock in some profit just in case there is some news event causing the market to spike. It is also okay to use the sma instead of the ema.

It is just that I find the ema more responsive to or price movement. I agree, the EMA is a fantastic moving average, you can catch large moves trading ema brakes on any time frame even 5M.

Hi, Thank you for your idea sharing with us. I have one doubt about which time frame is most suitable for day moving average. The days EMA is suitable for all time frames. You can try plotting this up on all time frames and see the effect of it.

I strongly suggest the use of this moving average as it is a very reliable support and resistance. Mail will not be published required. Wednesday, June 21, Forex Indicators Best Forex Signals Best Forex Indicators Guide. Home Why I Trade For a Living Privacy Disclaimer Contact Me Forex Street University Course Testimonials My Forex Signal Service. December 25, at 1: January 12, at September 3, at August 29, at 8: January 19, at 6: January 21, at 2: August 17, at 9: August 19, at December 14, at 7: December 28, at March 27, at 5: March 29, at November 27, at 2: December 1, at January 27, at 4: November 10, at 5: November 15, at October 12, at October 12, at 9: October 6, at 7: October 7, at September 14, at September 15, at 9: July 11, at 8: July 13, at 2: June 28, at 7: June 19, at 9: June 20, at 4: July 18, at 9: July 19, at 1: July 19, at July 25, at April 13, at 8: April 25, at 9: March 30, at April 11, at January 25, at 2: Dr Julius Ssemakula says: December 28, at 5: July 29, at 2: July 28, at 9: July 31, at 3: July 24, at 7: June 27, at 5: June 29, at 2: Speak Your Mind Tell us what you're thinking Click here to cancel reply.

Ask Kelvin CLICK HERE to ask me about anything related to this Blog, my Course, my signal service and Trading in general. Enter Your Name and Email Below To Download My " Secrets to Successful Forex Trading " ebook where I will show you the exactly reason how I stay profitable consistently in forex trading every month without fail.

My Strategy Performance CLICK HERE to find out the LATEST Up To Date Performance Report of my Forex Street University Strategies.