mksaife Posted December 1, 2012 Share Posted December 1, 2012 Advanced Technicals – Moving Averages In Tip #14, I talked about some of the basics for technical analysis. Trends and simple chart patterns are just the tip of the iceberg for technical analysis tools. There are many advanced tools that technicians use to try to find signals in the market price. One of the terms you might hear quite often is moving average. The moving average for a market plots the result of a calculation that averages the prices in a certain time frame. Fans of the indicator say that it “smoothes out” the data, giving a clearer picture of potential trends. The word “moving” refers to the way that new data is added while older points are dropped. A simple moving average would take the closing prices from a set number of days – let's say 20 days – add them all together, and then divide by 20. The result can be plotted on the chart. The number of days is usually up to personal preference. The more days used to calculate the average, the smoother the line will be. Here is an example of a 5 day versus a 30 day moving average: 5-day - Past Performance is not necessarily indicative of future results. Chart courtesy of Gecko Software. 30-day Past Performance is not necessarily indicative of future results. Chart courtesy of Gecko Software. See how the two compare? The 30 day has far fewer dramatic movements in it. The choice of line usually depends on the strategy that you are looking to use with the moving averages. Some moving averages use a formula to give recent data more influence on the final numbers. One of these is the exponential moving average, which some computer programs might use if you select this indicator. The following chart shows the difference between a simple moving average (in red) and an exponential moving average (green) where both are calculated for 10-day. See how the EMA looks like it responds to the changes in price faster than the SMA? Past Performance is not necessarily indicative of future results. Chart courtesy of Gecko Software. One of the most common uses of Moving Averages is in confirming trends. Moving averages use data or prices that are in the past, so they are not really good for predicting trends. The slopes higher or lower in the moving average line can be used to help a technician looking to confirm a possible trend. Take a look at the chart of the 5 day moving average. A trader looking to hold a long position would probably not be comfortable doing so if the current prices were above a downward sloping moving average line. On the flip side of that, a short position would not be on the top of a trend-traders list if the market price was above the line. Some technical analysts use larger or bigger MAs to try to identify support or resistance. If the market price bounces off the line for a 100 or 200 day moving average, it is a possible spot for support or resistance. Trading opportunities might come into play if the prices crossover that line. Other strategies using MAs come into play when the lines for two different time periods cross each other. In this way the technical analyst will be watching for signs or confirmations of a reversal. Moving Averages can be used alone or as a complementary tool to other analysis. Like most technical analysis tools, the moving average for a market can be used in tandem with other analysis. It is a lagging indicator, since it uses price data from the past, so there is reason to keep it handy for confirming trends, rather than trying to apply it in a predictive manner. Keep in mind that different time periods might be more appropriate for specific trading intentions. If you are day trading, it probably wouldn't be the best use of your chart reading time to use a 50 day MA. You might feel better with something that is an aggregate of minutes or hours. Do your research and practice, and you might find that this simple technical indicator suits your style. Day trading is fast, and risky, and not for everyone. The quick pull-the-trigger style trading that is synonymous with day trading is not for everyone. There are great disadvantages and heavy risks. I think the big trick is to find and stick to a trading plan. Having a pre-determined approach to the market – a place to get in and a place to get out for profit OR for loss – should help you keep your head on straight. Trading with a plan instead of raw emotions is what separates the cocky cowboy image most people might have from the actual serious day trading reality. Best Trades to you, Larry Levin Founder & President- Trading Advantage TradingAdvantageCom Quote Link to comment Share on other sites More sharing options...
luke1 Posted December 3, 2012 Share Posted December 3, 2012 Well, this article here is very long. There are many other articles and written by many people. They claim, their strategy is the best ever, and the only best secret to win on Forex trading. But, until now here, we see, they are all about the same thing here Quote Link to comment Share on other sites More sharing options...
rexway Posted December 3, 2012 Share Posted December 3, 2012 That is one funny thing about forex trading for you so many article and books will tell you that their trading method or system is the best but after the testing you will fineout that what they offer is nothing but useless writ-up which they did not even care to try. Quote Link to comment Share on other sites More sharing options...
luke1 Posted January 24, 2013 Share Posted January 24, 2013 That is one funny thing about forex trading for you so many article and books will tell you that their trading method or system is the best but after the testing you will fineout that what they offer is nothing but useless writ-up which they did not even care to try. Yes this is true and very funny thing for us. This is why, we can not really trust about so many articles, how to do, what to do in forex trading. Because then we will see, there is no result at all about this thing here. Then what happen with us as the investors here, we will only lose our money then Quote Link to comment Share on other sites More sharing options...
Achiever2015 Posted January 26, 2013 Share Posted January 26, 2013 It's really funny to hear people say things like 'secrets to making profits', in a greedy and self-centred world like ours. Truly you find things like this, but we really must come up with our individual trading secrets. That'll be our little secrets! Secrets are not announced over the megaphone. But thanks for the piece, it'll add up to my little secrets. Quote Link to comment Share on other sites More sharing options...
PROPENSITY100 Posted January 26, 2013 Share Posted January 26, 2013 Yes actually when a system works for sometime it is simple boasted that its the very best and flawless. However when a system fails its not spread and quietly ignored. So we should be very careful in choosing a Forex strategy and applying it. We should take many factors into consideration like market conditions and economic news before selecting a strategy. Quote Link to comment Share on other sites More sharing options...
Achiever2015 Posted January 26, 2013 Share Posted January 26, 2013 Most time when a strategy or formula works for a trade or two, we assume we've got the 'genus instinct'. Forex is not some predictable physical laws. Its volatility demands us to keep abreast in our fundamental and/or technical analysis to succeed. Quote Link to comment Share on other sites More sharing options...
riddick09 Posted January 27, 2013 Share Posted January 27, 2013 I think it's not a secret trading tip. Because, it's just usual as is technical analysis. And all of it can be found and learn through online resources. And therefore, we can even make our own way of trading and therefore, we can have a unique trading and plans to make success in trading. Remember, that even saying they have their own secrets they are still going to lose in some trades. Quote Link to comment Share on other sites More sharing options...
tirus Posted January 31, 2013 Share Posted January 31, 2013 Forex trading is actually very transparent as we can see from the vvarious online resources that are available for us to learn from to improve our trading knowledgge and skills. Its just about using the provided guidelines and knowledge that we have gained in our trades properly to see success. Quote Link to comment Share on other sites More sharing options...
Achiever2015 Posted January 31, 2013 Share Posted January 31, 2013 Very rarely do you see successful trader/investor come to the open and declare the secret of his/her success. What we have at our disposal are the numerous resources that discuss trading strategies whether using forex news or technical analysis. We can harness these and come up with a strategy that suits us. Quote Link to comment Share on other sites More sharing options...
chintu Posted February 3, 2013 Share Posted February 3, 2013 I dont think any tricks work in forex . may be it would be good if you call it as a strategy rather than tip . Because most of the times i see that there are no tips available to the traders to have a profitable trade . I can simply say that it is always better to try to get some good working strategies and that will surly help you to earn good decent income every month . Quote Link to comment Share on other sites More sharing options...
Bonnie Berry Posted January 10, 2015 Share Posted January 10, 2015 This is the half of the issue people face and the reason behind they cannot improve as they mainly are seeking for secrets or magical formula which is really not available, therefore they end up suffering but if we clear our mind and believe there is nothing secret or magic we could improve so much with simply learning techniques. I started trading with OctaFX broker and I have learned there only with their demo account, it is a true ECN broker so their demo is also great to practice due to smoothness and to learn from. Quote Link to comment Share on other sites More sharing options...
rizwanramzan Posted February 8, 2015 Share Posted February 8, 2015 I don't think that this trick will become a key to success in forex. There is almost no absolute tip, that can guarantee you success in your trade. The only thing that can make you a successful trader is knowledge. The more good knowledge you have about forex, the more is the chance of winning. However, we can implement this tips as a strategy for our trading. May be it will came handy in it. Quote Link to comment Share on other sites More sharing options...
myregister Posted February 9, 2015 Share Posted February 9, 2015 I don't think that this trick will become a key to success in forex. There is almost no absolute tip, that can guarantee you success in your trade. The only thing that can make you a successful trader is knowledge. The more good knowledge you have about forex, the more is the chance of winning. However, we can implement this tips as a strategy for our trading. May be it will came handy in it. Everything has losses so it does not guarantee anything but still you may get some bucks from it. Stil be careful with those kind of magic formula, also a site that asking you to buy their strategy is the one that you should avoid, if they want just share it with free. But some tips from other members in this forum are totally fine to follow since most of them sharing their experience. Quote Link to comment Share on other sites More sharing options...
Upul Tharanga Posted May 12, 2015 Share Posted May 12, 2015 My two cents is to believe in you and never ever in any situation consider yourself any lesser, if we don’t believe in our capability then we will never be able to grow. The first step is to believe in what we can do and then worry over everything else, if a person has weakness he surely has strength, so it’s just spotting it and becoming successful with it. My biggest strength is my broker Nova FX, it’s a world class regulated company, so I am not required to have anything else. Quote Link to comment Share on other sites More sharing options...
pepy Posted May 19, 2015 Share Posted May 19, 2015 I am wondering if there is any secret in forex, in fact this is actually a common thing that many people know but they are just neglect to pay attention to these things, those secrets are basic things that turn out need more determination from the users before they are getting used or familiar with it. Quote Link to comment Share on other sites More sharing options...
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