200 moving average as Trend Line Strategy
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Thread: 200 moving average as Trend Line Strategy

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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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    Wow, so moving average can be used as a trend line, It is interesting for you to share this type of insight about the moving average, I have always heard about it being used as a dynamic support and resistance, for you to have said it can be applied as a trend line and you gave example with a chart is really good, I just hope you will update this thread regularly and provide further charts examples and explanation.

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    Quote Originally Posted by Leonvic View Post
    Wow, so moving average can be used as a trend line, It is interesting for you to share this type of insight about the moving average, I have always heard about it being used as a dynamic support and resistance, for you to have said it can be applied as a trend line and you gave example with a chart is really good, I just hope you will update this thread regularly and provide further charts examples and explanation.
    Of course I will give charts example about this strategy in real time, I have not done analysis for this week to know the pairs that ha satisfied this condition, the beautiful thing is that this strategy can be used for any time frame as long as the forex trader has been monitoring the pair, I strongly advice against entries that are not properly planned for. That is just the best Avenue to lose.

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    Personally, I have used the 200 moving average to first determine the main market trend and then use my trading tools to execute my trades at the right time, and I believe when you are able to determine the major direction of the market price then you would not likely make mistakes and even when the market prices goes against you then it would not be much.

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    Quote Originally Posted by Penuelophir View Post
    Personally, I have used the 200 moving average to first determine the main market trend and then use my trading tools to execute my trades at the right time, and I believe when you are able to determine the major direction of the market price then you would not likely make mistakes and even when the market prices goes against you then it would not be much.
    The traditional use of the 200 moving average is for the forex trader to buy when the trend is up meaning that price is trading above moving average and then make only sell attempts when the trend is down, it is important that one understand how this movement work very it can be used as a trend line, something I also believe about this strategy is that, people who have previously traded either the moving average or trend lines won't have much issues with my explanation.

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    200 moving average is a very popular setting that can be used for trend identification, but using it as a trend line is a totally cool idea, I myself have been trading the 50 moving average but the fact that you have mentioned how this can be used for trend line trading is a game changer, the explanation itself is quite simple judging from the chart that you uploaded, let me see how this works in the live account.

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    I think I have learnt some good ways of using this moving average as a trend line. If this is so, then drawing trend lines might not be always necessary. I have not been a fan of indicator for a long time but I am seeing good potential with this moving average and its a good one that have prompted me to check past histories to what you have explained which is a good and effective too. I most times set this moving average to 50 but now I will have to add an exponential 200 moving average for a better trend identification.

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    Quote Originally Posted by Tonycee View Post
    I think I have learnt some good ways of using this moving average as a trend line. If this is so, then drawing trend lines might not be always necessary. I have not been a fan of indicator for a long time but I am seeing good potential with this moving average and its a good one that have prompted me to check past histories to what you have explained which is a good and effective too. I most times set this moving average to 50 but now I will have to add an exponential 200 moving average for a better trend identification.
    The essence of having a journal to dish out what we know about the forex market is so that our fellow members can apply this in their trading if for some reasons they see sense in what the thread starter has said, I am happy that you have gotten something new from this strategy, I will keep updating it regularly so that everyone else can have greater understanding about it in the coming days.

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    It is never a bad thing for traders to be using the 200MA, i have used 200EMA, 100EMA and 50EMA, they are working as support and resistance, just like the way the trendline is working as support and resistance. If traders wants to use it as their trendline, it will not actually behave perfectly as the trendline will behave, but it will try to work fine for the trader. And when the breakout occur on the MA lines, the trader will know that the direction has changed.

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    Quote Originally Posted by simisola View Post
    The essence of having a journal to dish out what we know about the forex market is so that our fellow members can apply this in their trading if for some reasons they see sense in what the thread starter has said, I am happy that you have gotten something new from this strategy, I will keep updating it regularly so that everyone else can have greater understanding about it in the coming days.
    You have a point there, when we share our strategies with other people, it makes our trading better, the saying that Sharing is caring holds true, I am now thinking about the possibility of adding the moving average as a trend line to the normal way that I trade, who knows I can just make some interesting discoveries personally, but why did you use the exponential moving average instead of the slow settings.

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