Simple Profitable Trading with 20 Moving Average.
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Thread: Simple Profitable Trading with 20 Moving Average.

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    Simple Profitable Trading with 20 Moving Average.

    The forex market is very dynamic, I have several systems that I use to trade which are mainly based on price action, the 20 exponential moving average is just one of them, all the strategies that have ever been developed are centered around support and resistance, there are different variations of this S/R some traders use the horizontal lines which is the most popular, otherwise apply pivots points, trend lines, fibonacci extensions and retracement etc, all these are just in a bid to understand where the market is likely to move to before it either does a consolidation or a continuation.

    The choice of a dynamic moving average by me is to ensure that I catch price at a pull back or maybe a break out point before it continues on its next leg of movement, I have seen this 20 EMA play out so powerfully in the market and I have taken several trades based on its behavioral tendency, here I will be showing how to trade it, the time frame and profit targets too.




    In the above screen shots we have the 4hr and 1hr time frame, in the four hour, price has consistently trade below the 20 moving average with no touches, the one time it did touch, price quickly went down, also in the one hour we see frequent touches which moved price down, usually I would sell at one of the touches from one hour and place my stop loss above the moving average while I ride the trend.

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    This strategy looks simple, there is a saying that when something looks too good to be true then it is probably because it is not, how effective is this 20 moving average, from what I understand people make use of 200 moving average more, I actually use the 200 EMA because it has some wonderful features which we can be very profitable when you catch the trend in the right direction, I will love to see more trade updates from you so that I an know what makes you takes trade in a real life situation.

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    Well, simplicity of a system is what makes it profitable believe me, I know that you understand the principles of KISS as a Forex Trader which is keep it simple and straightforward, that is what I have decided to do with this strategy, using just the omehow but I also combine this with the regular support and resistance lines which helps me to flush out the wrong signals that I might get in the course of picking a trade, what we all need as traders is understanding that the strategy is not the main issue with us but our mindset and approach.

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    Quote Originally Posted by Leonvic View Post

    The choice of a dynamic moving average by me is to ensure that I catch price at a pull back or maybe a break out point before it continues on its next leg of movement, I have seen this 20 EMA play out so powerfully in the market and I have taken several trades based on its behavioral tendency, here I will be showing how to trade it, the time frame and profit targets too.

    Very good idea, In general, many traders who enter the market directly when the price of crossing MA, but here you are doing in another way through an approach to a better understanding of price action, you have be patient to enter the market by waiting for the price retest MA level. I do like your style.

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    Here is a trade of gold that I entered a while ago, my entry was based on the fact that price made an impulsive sell off after it went bullish for sale while, my selling was based intra price action, I am hoping that price reaches 1255 which is where I have my take profits, my stop loss for this trade in gold was 1260 with my trigger point at 1268.64




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    Quote Originally Posted by Leonvic View Post
    Here is a trade of gold that I entered a while ago, my entry was based on the fact that price made an impulsive sell off after it went bullish for sale while, my selling was based intra price action, I am hoping that price reaches 1255 which is where I have my take profits, my stop loss for this trade in gold was 1260 with my trigger point at 1268.64



    I don't know how this trade of yours went but from the screen shots that you posted on can observe that you sold this pair from a clear support area which has held several times, that tells me there is a chance that it will likely bounce away from it, maybe you should consider the use of regular support and resistance before you take a trade to prevent bad trades.

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    When there is trend on the market then it gets more simple to be able to make use of moving average in trading, but when there is no trend on the market, it is hard to make use of it. profitable trading means in the market depends also on the time frame. I did used moving average and sure, it works on trending market and works more on some good major pairs like GBPUSD.

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    Quote Originally Posted by Ehis View Post
    I don't know how this trade of yours went but from the screen shots that you posted on can observe that you sold this pair from a clear support area which has held several times, that tells me there is a chance that it will likely bounce away from it, maybe you should consider the use of regular support and resistance before you take a trade to prevent bad trades.
    The trade was a loss, there are certain things that happened which led to that, and of course we know that gold is naturally unstable and unpredictable, I learned something from the trade though, never trade around a support or resistance except it had been confirmed to be trending in the direction you intended. I am happy about the lessons learned.

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    I love the moving average a lot because it is one of the easiest way to understand market breakout and the direction of the market to follow.I love to combine the 21 and the 14 moving average when i am looking for the best position to enter into the market using the H1 time frame. My personal belief is that trading system should be made as simple as possible and that is exactly what i have each time i make use of this moving average that always give me a vantage position in the market.

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    Quote Originally Posted by glory3 View Post
    I love the moving average a lot because it is one of the easiest way to understand market breakout and the direction of the market to follow.I love to combine the 21 and the 14 moving average when i am looking for the best position to enter into the market using the H1 time frame. My personal belief is that trading system should be made as simple as possible and that is exactly what i have each time i make use of this moving average that always give me a vantage position in the market.
    Trading really has to be simple, that is my philosophy because when we make our trading system to be very complex, that is when we will see this business to be very difficult, but trading with moving averages can be very interesting when you have the right settings and also the ability to take trades with the trend, I love the way moving averages give you their signals, it makes life as a Forex Trader a whole lot easier.

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