Thanks for posting this subject. I too have recently started using the 200, 100 and 50 SMA after seeing it on David Jefferson’s thread. One principle that i have understood from it is analysing price in terms of the average, i.e. how far it is from the 50, 100 or 200 sma. As i believe all market participants would want the best price possible i.e. when the price is on one of those SMA’s.
I didnt quite understand how David used it. I think he said something like when the price is below the 100 and going towards the 200 then the best option would be to short it and vice versa.
I just wanted to learn how everyone else understands the SMA’s and how they use it, in the most simplest words. So if you guys can elaborate - that would be excellent.
Your very right, i absorbed as much as i could from Davids thread but I do not trade the same way I will brake down what i can. David Jeffersons thread is truly the most informative i ever read.
Daves idea is that when price is above the 200sma bulls are in control and when price is below the bears have power. David says never go long below the 200 and never short above. As statstically you will get burnt. If price is below the 200 and moving up its still bears in control so dangerouse to go long.
so basically best place to enter long when price passes the sma upwards and short vissa versa. Buying long on the sma is considered buying low. if you pratice on a demo entries on the sma it wont take you long getting used to when is a good time to buy and sell. I sujest you read and re read davids thread its the most valuble trading method i ever read and i applied so much of it into my trading. The 100 and 50 really act like a channel line when the price is trending.
i adapted my entries as i find some currency fit the 200 Tema more then the 200 SMA and visa versa.
look at it this way, when price comes from below the 200 and passes up and does not pass below, you normally get a rally 10 pips then pull back to the sma, then thats a good time to go long on the pullback. Alternative go long on the first pass of the 200 and on the first 10 pips or whatever split half ur position as profit. that covers the trade. cos u can move ur stop to no loss if you want. better to leave ur stop below the sma if long and short visa versa.
If you study the charts you will see how the market reacts on the 200.
To avoid fake outs on the 200 when you are on 1 hour chart, its good to go to 4 hour and look for channels, sometimes on a trade it pulls to the channel before passing the sma thats a great sure entry. Check channels on 1 n 15 min to …daves thread has so much stuff i cant cover just study it more. i spend time going back to Davids thread as its its brilliant. But i have adaptered what i have learned from David into a system that works for me so i do not want to currupt his teachings. but the most important part of the way i trade on the 200 is pretty much within the same view of the market as David.
Also i would like to just make it clear that there are many people including David who have much great technical ability then me in the Forex market. I must add please use your fibs to and support and resistance lines, look left on the charts.
I just woke up, london is not open british time is 6 13 right now…whats of interest in EURCAD EURJPY EUR GBP possibly EUR JPY will be my first entry, 616 time now and price is 98 513 on the sma,
ok thats it im done for the day, its 7.41morning UK time i am in Bahrain right now and its 941 here. Took short on the SMA at 98 532 on EUR JPY on the 200 SMA 1 Lot Short. Split the position took half profit at 27 pips , moved my stop to 98 543 and what ever happans now i cant loose (Already filled with halfprofit split) so i will just let the postion run and walk away… Stress free trading approach…thanks to the contributors on this site and special thanks to David Jefferson and codemaster.
David Jefferson (or whatever his name really is) is widely believed to be a con artist (under investigation). Whilst no one disputes the value of the big MAs, do keep in the back of your mind that [B][U]his[/U][/B] possible motivation was not all honourable.
Lets please not make another thread of bashing David and starting another investigation on his motivations and actions. I really couldnt care if he sold his own grandmother.
Thanks dennis14685 - I’m going to re-read your posts as the MA’s still confuse me. For example - if the 200 SMA is on $1.00 and the price is at $1.15, then isnt it more sensible for the big boys to buy at the best price i.e. $1.00, this sentiment arising from the high price should lower the value rather then make it bullish?
just keep in mind that the price on the sma is considered buying low, so if you want to go long below the 200 that would be considered dangerouse as price below the 200 would be considered as a possible short…or another words in most cases trend begins at the 200. so you need to work out what direction the trend will be in. So that would mean all the old suspects come into play…S@R , fibs challes pivots and so on…common sence
i trade both demo for stategy and real money for a living. To answer your question. You will answer that for yourself once you have gained more experience demo trading, as you need a trading plan and that plan includes position size euity and risk ratio, its all part and parcel
hope i posted the right chart i have open trades eur cad long eur jpy long…sl is same entry both postion cased in half profit so feeled remainder to run
this is the eur jpy ignore the chart which has entry on it i sent the wroung file
the dark blue broken line is the 200 tema and the dark red is the 200sma the orange is the 100sma from daves teachings and the light blue is the 50sma…i use tema to and i do not take any signal under 1 hour time frame as relevant
Ok this is why once the trade is open i split the position so that if the market takes my stop the looser is not a loss. Th Cad took my Stop but no loss half filled.
now this is why once the trade is half filled , I leave the SL on entry and do not fiddle or anylise i let the market do what it does. Unsettled EUR/JPY 34 815.20 JPY 0.0128 444.10 USD nice little earner to wake up to first thing in the morning.
OK its 908 am uk time, the trade has been positive since opening, i just split half of one lot and took profit 60 usd. now the position is covered can not loose on the remainder half lot in the market as already covered by 60usd profit …So i will let it run its course and move on to the next trade…I am posting this info so that people can see how simple trading is , no need to anylise charts, just keep it simple and i hope its of beneift to everyone …I am posting live trades and any losses will be posted to. Lets all help each other its free
