Even at the most basic indicator forex — Moving Average can build a profitable trading strategy FOREX or the so-called trading system.
For example, we construct two MA (Moving Average) with different periods of 21 and 70 (depending on the selected time interval, select the type of Moving Average — EMA (at intervals ranging from daily: D1, W1, MN) or SMA (charts within days : M1, M5, M15, M30, H1, H4).
After breaking through the price of one of Moving Averages, you need to wait — pause and wait for the closing of the current candle. If prices on the chart turned around before reaching the 2-nd moving average (the older period — 70), then enter the market at the intersection (or a little earlier) MA (21).
Stop-loss at this place a little below the bottom of a recently formed or peaks.
In this strategy, forex course, there are some drawbacks, and one of them — is spurious signals that may make this trading system at the end of the trend. But there is certainly a very important advantage — it’s the fact that trading in this strategy, you will always follow the trend, despite the wishes of an inexperienced trader to trade against the main trend.
Examples of entry into the market looking at the picture:
Change of the same basic trend, we will indicate the intersection of the 2 moving averages. If the MA with a period of 21 crosses of MA in 1970 from top to bottom, then the trend reversed to downward and can be sold. If on the contrary — you can buy
