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Thread: 200 moving average as Trend Line Strategy

  1. #1
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    200 moving average as Trend Line Strategy

    Many people know how to use the trend lines and many others are skeptical because they don't know how to connect the tops or bottom, I have a solution to that with this strategy, it is a price action strategy that works from the practice that I have done. To use this strategy, remove all indicators from your chart and then put the moving average with this setting, 200 is the future to use and then apply it to close, use the exponential for best results.

    There idea is very simple, price will always trend and when we see a breaking above or below the 200 moving average, what we are expecting thereafter is for price to return to it and bounce off, that is exactly how the traditional trend lines works, we cannot trade until we see a touch, many times we are going to experience a false breakout of the 200 moving average and then a pin bar will form a little above it, that pin bar is what will prompt us to enter, stop loss will be below the moving average or above depending upon a bearish or bullish market. Take profit is always a minimum of 2:1 risk reward.

    IIn the charts of EUR AUD, price broke above the 200 moving average in the place I mark with blue, after that it returns to the moving average twice and bounce off, where I market with green, those green zones are where we pull the trigger and put our stop loss right below the moving average.

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    If we cannot get an entry with the indicator which we believe we wish to trade with, then it will be very useless to us, trading without planning to use same strategy for entry and exit does not make any sense, that could be classified as someone who does not even have a trading system at all, forex trading with 200 moving average as trend line should give the trader the exact price to pull the trigger.

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  3. #22
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    With my strategy of using the 200 moving average as a trend line, I have seen a buying opportunity with EUR USD, now my bias for this pair is bearish because price has already made new lows, I am only buying on a short term, there will be a reversal of this pair soon as I am hoping to make some profit before that can happen, price bounced off the 200 moving average several times before it did a falsified break downwards and went up. I bought with stop loss below the swing at 1.1375 and take profit at 1.1440.

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  4. #23
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    This trade did not do well as I was anticipating because for sole unknown reason the EUR USD started to sell, there were several moves up and down before the market eventually hit my stop loss, that is forex for you anyway, there is absolutely nothing that can be said to be guaranteed, hence we are always advice to go for money management as a protective measure.

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    Rookie juniorpeters's Avatar
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    this strategy is a good one,that is why i talk a lot about moving averages.they can be used to trade the market is many different ways but for the 200ma i thought they are largely used for trading higher time frames?i don't know but that's what i have seen many traders use them for but it seems like you are using the strategy very correctly and your making turn over that's a good one mate.

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  6. #25
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    To find the market trend moving average is best way of trading and to follow this strategy we will know easily the market trend. trend line is the most easy trading strategy and to use this trend line trading strategy is give us easy success. Moving average is give us high accuracy in trading and 200MA is best for follow the long term trading methods.

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    I see good potential with this system and we all know how effective the moving average is in our trade. The 200 moving average is good enough to define the trend of the market while we make possible entry where its necessary. It will be a good one that can work as support or resistance level too which will bring about better entries in the market. Sometimes we might not be right always but this moving average have always show consistency in guiding traders to make the right decisions.

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    Trend lines has never been one of my be favourite trading strategy but with the way this moving average has been used as a trend line replacement, I believe that the Forex trader can make money from this strategy if the rules are followed as explained, I use the 20 exponential moving average to trade outside my Ichimoku strategy so I understand what moving average can do for the trader.

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  9. #28
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    Quote Originally Posted by Sixteen View Post
    I see good potential with this system and we all know how effective the moving average is in our trade. The 200 moving average is good enough to define the trend of the market while we make possible entry where its necessary. It will be a good one that can work as support or resistance level too which will bring about better entries in the market. Sometimes we might not be right always but this moving average have always show consistency in guiding traders to make the right decisions.
    basically moving average is one of the popularly use indicator in forex trading the good thing about the indicator is that it easy to use provided we understand how to make use of the indicator while trading,basically forex is based on knowledge and understanding on the market before one can earn from trading.

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  10. #29
    Rookie ict2014's Avatar
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    No doubt there that 200EMA is a strong price direction pointer in forex business. But it does not work always when price two more times come near the EMA and move to the current trading path then we can assure price will continue same trading path and we can drop our position with. I see high impact news always a factor that can take a major change in price direction.

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  11. #30
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    The 200 moving average is a very powerful moving average and if used very well can generate a lot of pips,the good thing about it,is that it can be used both as support and resistance line,it will required a lot of patience any way,because during reversal before price crosses that level it takes a lot of time.

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