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Forex Indicator Moving Average

Forex Indicator Moving Average
Forex INDICATOR: moving average (moving average)

I. What is a Moving Average?
First of all, it is important to know the Forex Indicator MA's Moving average are important tools of technical analysis Forex chart. Technical analysis is defined moving average as a TREND-FOLLOWING - Forex INDICATOR.

II What do moving averages Forex Indicator ?
Prices of a currency to rise or fall not along in straight lines. Even in a downtrend, there are moments when the price rises. This complicates the technical analysis to identify a trend at all. Moving average MA Forex Indicator smooth out the price for a certain period , the inevitable "noise" is filtered out in the price movement.

III. How does moving averages Forex Indicator ?
Its principle is relatively simple: An SMA (200) Forex Indicator in the daily chart means nothing else than the average of the last 200 days. An Forex Indicator SMA (200) in a 5-minute chart means the average of the last 200 5-minute periods.
Depending on the type of Forex technical Indicator Moving average, Average Rates are calculated differently, and weighted.

IV Types of Forex Indicator moving averages in technical trading:
The Types are most commonly used in Moving average trading:

- Simple Moving Average Forex Indicator SMA
The calculation is simple: The price values over a certain time period added and the result is divided by the number of time periods. The result is the average price over a specified time period. The greatest disadvantage of SMA Forex Indicator is that all periods are equal.

- Weighted moving average Indicator Forex
In this MA Indicator Forex ,Moving average weighted is calculated as follows: each time period is multiplied by a weighting factor. This ensures that the last time periods more importance is attached, as the previous time periods.

- Exponential Moving Average Indicator Forex
Here too, the recent price action as more importance is attached to the older price value, however, the calculation is different from the Indicator Forex Weight Moving Average WMA.

V. The choice of Moving Average time period
The choice of time period is the critical element in the use of an Indicator Forex MA Moving Average. The important thing is personal preference and also the time frame in which to be traded. Moving average trading indicator with shorter time periods are "closer" to the price and move more sensitive based on price changes.
Indicator Forex technical moving Average with larger time periods are further away from the price and this moving average do not move with price changes immediately. They are ideal to changes in trends and trend directions.

Moving Average setting periods:
• Moving Average setting period 0-25 as a short term
• Moving Average setting period 26-55 as a medium term
• Moving Average setting period over 55 periods are long term.

VI. The application of Indicator Forex MA in practice:
Moving Average are used to:
• To smooth price curves
• To determine trend direction
• to determine support and resistance levels. Indicator Simple moving average can determine support and resistance level for Forex price

However , Most often moving average use as a trading signal.

VII Trading with Indicator Forex MA's
There are several approaches and strategies in Moving average trading to generate signals.

Moving average lines intersect cross over. Now what?
First of all, it is important to know what's Moving average indicator forex is. The overlap cross over of a 70 moving average with a 100 MA moving average is relatively uninteresting. It is something else when a Indicator Forex Moving average MA (20) and Moving average MA (80) Indicator Forex crosses, as the MA (20) is short and fairly close to the forex price. The Moving average MA (80) is long enough to detect a trend. In general, the 1:4 rule is enforced, which means that you take the short moving average MA 4 times to determine the long-term MA Indicator Forex .
Now, if the Moving average MA (20) from bottom to top the MA moving average (80), crossed a buy signal is triggered. A sell signal is triggered when the Indicator Forex Moving Average MA (20) cross from top to bottom the moving average MA (80).

It should be mentioned at this point, however, that does this kind of action only in significant price or uptrend. In sideways many false signals are generated. For this reason it is not only possible to trade the moving average cross over.
Much more meaningful it is the MA is to act. That is to say, if an MA is rising then acted in that direction.

Another strategic approach is when the price crosses the MA. It has the SMA (200) proved. Breaks through the price of the Indicator SMA (200) from bottom to top is called Long. Vice versa If the price of the Simple moving Average SMA (200) goes to Short. This trading strategy works better in the higher the time frame. This type of trading is also possible with the SMA (144) moving average.

You can also combine 3 MA moving average to trade with you.
An example: we draw a 5,15,30 SMA Simple moving Average Indicator Forex in the chart. Crosses the MA (5) the MA (15) from the bottom up, we are preparing ourselves to buy. Is then pierced by two MA moving average, the MA (30) from the bottom up, we buy. The phasing out of position occurs when the shorter MA Moving Average crosses the middle again.

VIII What are Whipsaws?
A word that is often brought in conjunction with Indicator Forex Moving Average MA, Mainly so that two things are meant:
- The price often crosses an MA, and
- The faster MA Moving Average Indicator Forex crosses slower MA frequently

Both often happens when the market is moving sideways, with no clear trend. The following chart shows both types of Whispsaws

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