One of the simplest trading strategy for newbies

Trading Systems Free Forex Trading Systems
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The Moving Average trading strategy is one of the simplest and it is very easy for beginners. Every new trader needs to know how to use this indicator. There are two ways it can be used. However, note that this strategy can only bring you little profit. Notwithstanding, you need to start small and work your way up. So do not ignore trading on MA. It is easy to use and gives clear trading signals.

You can use a Demo account for testing. As for me, I prefer a Live account. When testing a new strategy, I just open a $5 Micro account with Profiforex. This gives you $10 = 1000cents plus 1:500 leverage, which is enough to do some practice Live. It has its advantages.

[B]The First Strategy on Moving Average[/B]

Insert the Moving Average to your Chart (Period 30). Every other parameter remain the same

When the price is higher than the MV, it is a bullish trend.

When the Price is lower than the MV, it is a bearish trend.

[B][I][U]Signal[/U][/I][/B]

[B][I]The signal to buy occurs when the price crosses the Moving average from the bottom upward

The signal to buy occurs when the price crosses the Moving average from the top downward.
[/I][/B]

You can learn how to do this effectively with a practical video
[B]Trading On Moving Average Tutor[/B]

[B]The Second Strategy on Moving Average[/B]

The one requires two moving average with a different period.

Insert the first moving Average (Period 50). Other settings remain the same

Insert the second moving Average (Period 15) choose another color. Other settings remain the same

[B][I][U]Signal[/U][/I][/B]

[B][I]The Signal to buy occurs when the moving average with a shorter averaging period crosses the other with a longer averaging period from the bottom upward. If the shorter MV is crossing the longer MV downward, we place a sell order. [/I][/B]

Instead of the price line crossing the long term moving period, we use the short term moving average.

Most likely you would need a practical demonstration on how to use this strategy.

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Proof with Moving average M30

Moving Average1.jpg700Ă—340 59 KB

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The moving average is one thing every trader needs to learn as it really helps in analyzing trend directions; of course we know trading trends is a cool way to gather pips in the forex. You have the signal to buy when the shorter period moving average crosses above the longer period average as it is now showing a possible uptrend.

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[B][I]The signal to buy occurs when the price crosses the Moving average from the bottom upward

The signal to buy occurs when the price crosses the Moving average from the top downward.
[/I][/B]

A better more accurate of this signal could be gotten from your MACD histogram. This time it is not only the moving average generating the signal. It interacts with a signal line to make the signal more accurate. When the histogram now crosses its zero line upward, it is a better signal to buy because this time you know it is even more accurate than the signal generated when a fast moving average crosses above the slow moving average.

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Some traders tend to overlook moving averages,but this is not the best. We all know prices in the forex do not move in a straight line. Moving averages are very helpful in analyzing daily fluctuations yet some traders feel it is too simple to be profitable. But it is not the complexity of the system that makes it more profitable. A very simple system will still give you profits if used with correct understanding.

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It is common to say that the signal from a moving average is not too reliable. It is true that there seem to be too many fakeouts from trading just one simple moving average. I would advise if this is what you are experiencing, add a MACD to your moving averages, it will filter the signal.

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For new traders, I feel the moving average is one of the first technical tools you should be learning in building your technical analysis. It is easier to spot trend with moving averages. When compared to regression tools, they are much easier to use just that they lag behind time.

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Shorter period moving average are more responsive and move more compared to longer period moving averages. That is why you see that the 50 period has more movement than the 200 period. To trigger a trend and sense a new one forming, watch out for when a shorter period crosses a longer one either up or down.

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Here is the result for today based on my trading system:
Broker: Profiforex (Standard account)
Trading System: Moving Averages
Signal: Buy
Currency pair: EURUSD
Amount traded:1k
Opening price:1.09717
Closing price:1.09812
Pips gained:9.5

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Here is the result for today based on my trading system:
Broker: Profiforex (Standard account)
Trading System: Moving Averages
Signal:Sell
Currency pair: EURUSD
Amount traded:1 microlot
Opening price:1.11121
Closing price:1.10977
Pips gained as profit:14.4

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Here is the result for today based on my trading system:
Broker: Profiforex (Standard account)
Trading System: Moving Averages
Signal:Sell
Currency pair: EURUSD
Amount traded:1 microlot
Opening price:1.11121
Closing price:1.10958
Pips gained as profit:16.3

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So are you guys having much success with this? Might demo it next week…

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Here is the result for today based on my trading system:
Broker: Profiforex (Standard account)
Trading System: Moving Averages
Signal:Buy
Currency pair: EURUSD
Amount traded:1 microlot
Opening price:1.11655
Closing price:1.11850
Pips gained as profit:19.5

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Here is the result for today based on my trading system:
Broker: Profiforex (Standard account)
Trading System: Moving Averages
Signal:Sell
Currency pair: EURUSD
Amount traded:1 microlot
Opening price:1.13867
Closing price:1.13682
Pips gained as profit:18.5

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Small and obvious point, the second option should read “sell” and not “buy”.

The entry trigger based on MA’s is common to many, many methods and is very reliable as such. However it does not work as a method if exit is based on a reverse crossover. That usually requires a significant follow-through of the price in order to generate a profit and is subject to much whipsawing in quiet and/or ranging markets (which is much of the time).

An MA method requires:

  • a good method of establishing a target exit level
  • a good method for setting a stop-loss exit level
  • determination and selection of active market times when there is most likely to be sufficient market momentum to drive the price to the target level
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Here is the result for today based on my trading system:
Broker: Profiforex (Standard account)
Trading System: Moving Averages
Signal:Sell
Currency pair: EURUSD
Amount traded:1 microlot
Opening price:1.14069
Closing price:1.13887
Pips gained as profit:18.2

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Do you use candlesticks with this? MAs are lagging indicators and they change within a specific time segment. What do you use to reinforce your MAs’ case?

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This very simple method does have some potential for building up pips and can be further refined with other indicators.
Are you trading this daily or only very occasionally? You have so far posted very few actual results.
what time frame are you generally using (although it can be applied to almost any) and what type of MA are you using, EMA or simple, etc?

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I prefer EMA and you can have re-entries if you consider the first method. I would suggest and recommend people understand price action and not just look for a step by step view is there is no perfect system. When the cross occur, look at the longer time frames to see what those trends are as well. if you paper trade or demo trade and keep a proper journal you will notice that this is very profitable … I have seen many many systems on here and each trade is different so no matter the steps, you need to apply some discretion and this is based on multi time frame views, Support and Resistance and price action. Coupled with any news events.

EG mine for today

  1. Currency pair: AUDUSD buy
    Amount traded:1 microlot
    Opening price: 0.76715
    Closing price:0.76865
    Pips gained as profit:15

  2. Currency pair: GBPUSD sell
    Amount traded:1 microlot
    Opening price: 1.41365
    Closing price:1.41548
    Pips as loss: 18.3
    This was as I was busy and didnt lock in profits when I should have.

  3. Currency pair: USDJPY buy
    Amount traded:1 microlot
    Opening price: 109.280
    Closing price:109.309
    Pips gained as profit:2.9

I use a manual 5 pip trailing stop.

21

I also mainly use EMA’s but also a SMA ribbon. I totally agree with your comment about multi timeframes. I usually use at least 2, sometimes 3, timeframes to give a good perspective on what is actually going on and whether there is a trend in which to keep positions longer or only a retracement with a near-term target.

I tend to use the same model on every timeframe and switch them according to my overall view of volatility. E.g. today, I didn’t anticipate much happening and relied on 15m/5m/1m charts whereas when it looks more “trendy” then I’ll upgrade to 1H/30m/15m. But I also look at Daily/hourly each morning to get a feel for the day’s prospects, events and key levels.

I only trade EUR/USD and look for 1/2 trades per UK and US sessions. This morning gave a nice 20pip move off the 5m/1m and then died. There was another nice up move after the numbers which again I had to view as short-term as hourly and 15m still down/neutral.

The core of my method is very similar to the basic method that Moneybaggy put here and that was why this thread interested me. But I have a few more “bells and whistles” on it such as this timeframe issue which I consider imperative.