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Moving Average Crossover Secrets

Get these Forex Scalping Cheatsheets FREE. Learn this powerful Fibonacci Retracement method FREE that pulls in 500+ pips per trade. This is a proprietary fibonacci retracement methof by Tom Strignano-an EX CHIEF BANK TRADER. Download this 50 page Technical Analysis Handbook FREE. This technical analysis handbook is a gift from the Eliott Waves International Club and is full of premium content that you should not miss. Moving averages are one of the simplest and the most popular technical indicators that can be used in any market. While using averages, the length of time used to calculate them is very important. Moving averages with shorter time periods fluctuate more activley and tend to give more trading signals. Shorter time period moving averages tend to whipsaw a lot that can cause losses.

Moving averages can be simple, weighted or exponential. In case of simple, all the prices are treated equally whereas in the weighted and the exponential averages, recent prices are given more weight so that these averages are more responsive to the recent prices as compared to the old ones. These averages tend to smooth out the price action that is more easy to interpret and understand.

On the other hand, longer time period averages move slowly with a smoother curve that can be slow in giving trading signals for entering into a long or short position. Now many traders use a combination of slow and fast moving averages in generating trading signals.

Many traders use a combination of three averages like the 4, 9 and 18 period. When the short moving average crosses the medim one this generates a trading signal. Now this trading signal is confirmed when both the short and the medium move above the longer period average. Stock traders tend to move longer periods like the 40 day, 100 day and 200 day averages to determine whether the stock is bullish or bearish.

Now next to trendlines, moving averages are the most widely used technical indicators. So when using moving average crossovers, when the short period average is above the long period average, you should be long. Similarly when the short period average is below the long period average, you should be short.

The crossovers of these short and longer averages provide the trading signal to act as they indicate that the momentum is shifting from one direction to another. Moving average crossovers are an important tool in the arsenal of any trader. Moving Average Convergence Divergence (MACD) one of the most popular indicator depends on them.

One important caveat about these averages that you need to always keep in mind is that moving averages are lagging indicators and do not work well in choppy or non trending markets. However, in trend markets, they work very well. You need to master them if you want a winning edge in trading!

The Ultimate Technical Indicator!

Download this Forex Secret Indicator just now! Discover Forex Brilliance and Steal Pips and download the powerful Trend Dash Board and the Trend Explosion System FREE! What is the best technical indicator to use in forex trading? Is it the Stochastic, the Average Directional Index (ADX), the Relative Strength Index (RSI), the Exponential Moving Averages (EMA) or the Bollinger Bands? Every day, a new technical indicator is hitting the market as technicians attempt to find the ultimate technical indicator. There are so many indicators available now!

So what is the Ultimate Technical Indicator? Well, to tell you the truth, there is one indicator that will always stand above the rest. And that indicator is the price action. You see all these technical indicators are formulas that are applied to the price action to get a trading signal.

Now in forex trading, we do not have the price in the real sense, we only have the exchange rate between the two currencies. This exchange rate is the relative price of one currency to another. For those who have been trading stocks before starting forex trading, this might be somewhat confusing in the beginning.

Now support is the price where buyers step in and start buying en masse. Think of the support as the floor. When you hit a rubber ball on the floor, it bounces back and returns to you. The price action bounces back from the support in the same way.

Resistance is the price where sellers start selling as a crowd. Think of resistance as the ceiling above you. When you throw a ball above, it hits the ceiling and returns. In the same way, when the price action hits the resistance, it bounces down.

You need to understand this that large players like the big banks, hedge funds and the institutional investors trade in a totally different manner as compared to us the small traders. As a small trader, we want to enter and exit all at once since our order size is too small.

But when a hedge fund or a large bank enters the trade, they usually have large order size. They don’t want to move the market and drive the price by too much buying or selling. So they enter the market gradually. In case of a large buyer, it might drive the price high. So instead of placing one single large order, these big players, enter the market gradually.

When the price reaches the support or the desired entry level of these big banks or hedge funds, they enter the buy order. Similarly in case of a large seller, a single order might drive the price still lower. So a large seller will always enter the market gradually. This way, you see the price bouncing back and forth between support and resistance.

Bollinger Bands Secrets That You Should Know!

Download this Forex Swing Trading End of Day Trading Kit FREE! This FOREX PROFIT ACCELERATOR FOREX-4 PACK Training kit has got 100+ page PDF plus videos that you won’t find anywhere else. Get these Forex Scalping Cheatsheets FREE. Learn thise powerful Fibonacci Retracement method FREE that pulls in 500+ pips per trade! Bollinger bands are an effective technical analysis tool that is used to measure the volatility in the market. So what are Bollinger Bands? Bollinger bands are bands plotted above and below a moving average. The recommended moving average is the 20 period average that is an effective representation of the intermediate trend.

Bollinger bands may be applied to any market or security. Any timeframes from daily, weekly, monthly to intraday can be used. Primary advantage of using these bands is to check if the prices are relatively low or high

Bands will be narrow when the volatility in the market is low. These bands expand when the volatility in the market increases. This information can be especially useful to options traders as options prices are heavily influenced by the swings in volatility.

When prices move above the upper band this is a sign of great strength and when they move below the lower band, a sign of great weakness. When prices move outside the bands, trend continuation is often a valid assumption.

Rapid and substantial price moves often tend to happen after the band tightens. Bollinger bands are often used in conjunction with other technical indicators to detect high probability trend reversal or turning points. The primary indicator that works best with these bands is the RSI (Relative Strength Index), MACD or the CCI ( Commodity Channel Index).

The bands that are plotted above and below this moving average are the moving standard deviations. These bands vary in distance from the average as a function of market volatility. Two standard deviations above and below the average is the recommended settings for these bands.

However, if the number of periods in the moving average is increased to 50 for longer term trends, the recommended setting for the bands should be increased to two and half standard deviations. Similarly, if the moving average period is lowered to 10, the standard deviation should be decreased to one and a half.

For the stock market as well as individual stocks, 20 period moving averages are the best. However, the average that is selected should be descriptive of the timeframe chosen. Trading bands is one of the most powerful concept available to a trader.

However, when prices touch these bands, it should never be taken as an absolute signal. It should only be taken on a relative basis and the price action needs to be confirmed with other technical indicators before trading on these signals.

Doing Incorrect Technical Analysis

Get these Forex Scalping Cheatsheets plus this 1 Minute Forex Trading System that makes money anytime you want instantly FREE. Win a FREE COPY of the HVMM Trading System by taking this trading quiz and also don’t forget to get FREE COPIES of the Ultimate Day Trading System and the Universal Risk and Money Management Tool! Most of the traders out there do forex trading using technical analysis. Not only is technical analysis very fast to do, but it also is fairly straightforward as compared to trading the news. But, to have profitable trades, it is absolutely crucial that the technical analysis should be SPOT-ON. An accurate analysis is what helps in identifying correct entry points and good exit points.

But the TRUTH is, most of the traders do INCORRECT technical analysis. More than 80% of their trades end in loss. And to be honest, that is not entirely their fault. Its just their interpretation is not entirely correct. And that is what causes frustration. Now let me ask you - “What if I can help you improve the accuracy of these Trades?” Candlesticks are amazing indicators and an ASSET for any trader who would like
to have large number of profitable trades.Why?

“Thats because Candlesticks is more or less the only technical indicator that can help you analyse WHAT HAS HAPPENNED and WHAT CAN HAPPEN NEXT” ……..Only if they are interpreted correctly! So, if you would like to

1. improve your trading performance
2. Analyse the forex charts with higher accuracy.
3. Increase the number of winning trades and
4. Avoid placing the trades that will end in loss

Using candlesticks CORRECTLY can make huge difference in your trading..And let me tell you, once you start using it, you would wonder how were you trading without them for so long! So go ahead and get my Forex Candlestick Magic course which is covered in Manual and Videos and take your trading to next level! Yes, Forex Candlestick Magic includes a manual and lot of videos so that you understand candlesticks correctly and become a better trader. There are two ways by which the overall profitability can be increased in any business -

1. By adding more profitable items - The most common used approach by people

2. By removing items facing losses - Only top experts focus on this!

If I use the same concept in forex, what this means is to improve the profitable strategy and cut short the strategy that is not working for you!!

The only issue that comes here is -

How to SYSTEMATICALLY know which trading system is working and which doesn’t? I mean it is very easy to pull the trigger after just two losing trades and say that the trading system doesn’t work. But there is a more systematic approach….and that is very simple and will cost you nothing! Through Trading Logs!

Your trading manual is like your best friend and will really help you improve your trading performances several notches. Essentially for each trade, at the minimum you must track -

1. The currency pair you traded
2. Reason for taking the trade
3. Opening time and closing time
4. Entry and exit price
5. Reason for closing the trade
6. Stop loss value used.

Such tracking will help you understand which aspects of trading are working and where are you struggling. For example, data from 50 trades can help you find which currency pair is profitable for you and what time of the day does trading suits you. I know a person whose overall trading performance improved more than 150% within a span of 1 month by just using trading log! So, incase you are not using Trading Log, Go ahead and do that immediately!! Incase you are looking for a forex course which includes highly profitable trading system which has strong money management principles!

5 Technical Indicators That You Should Know!

Get these Correlation Trading and Forex Scalping Cheatsheets FREE. Combining forex scalping with correlation trading can be a powerful combination. These cheatsheets explain to you how to do forex scalpign and correlation trading. Learn this powerful secret Fibonacci Retracement method FREE that pulls 500+ pips per trade. Watch the whole video by Tom Strignano-an EX CHIEF BANK TRADER who explains this powerful fibonacci Strike Method in detail. The number of technical indicators that are now available in technical analysis is huge and large. Now every trader narrows down the list and in the end only trades with two or three technical indicators most of the time. These two or three technical indicators give them a certain comfort level in making trading decisions.

The truth about indicators is that they can only analyze historical data. Their effectiveness is therefore limited and sometimes very misleading. What you need to learn is the master a few technical indicators in such a way that you know their strengths and weaknesses in depth. What this means is that you can interpret the trading signals and by looking at the market, know whether the trading signal generated by the technical indicator is relevant or not. We can divide technical indicators into the following broad categories:

Average Based Technical Indicators: These are the most popular technical indicators among the traders and include the different moving averages. The number of data points used in calculating the average is based on the time frame. The problem with this indicator is that it is a trailing indicator. It cannot anticipate. It can only report on the historical moves. Since an average based indicator is only a trailing indicator, it should always be used with caution.

Fibonacci Based Technical Indicators: Fibonacci based Technical Indicators are truly leading indicators and can effectively anticipate future price movements. Experienced traders heavily depend on these indicators as it helps them to anticipate other trader’s intentions. Market are overbought or oversold due to humans trying to trade their emotions. However, most traders use Fibonacci indicators as tools in conjunction with other indicators.

Trend Based Indicators: You can draw a simple trend line by connecting the high highs or the low lows. This is one form of a simple technical indicator. However, constructing a trend wall can be a much superior indicator as compared to the trend lines.

ABCD Parallelogram Indicators: These indicators are closely connected with the Fibonacci Indicators. It is based on the concept that every surge will be followed by a retracement of the same level.

Divergence Indicators; Divergence indicators like the MACD ( Moving Average Convergence Divergence) Indicator are highly popular with the traders.

Learning technical analysis and mastering these technical indicators are must for you if you want the edge that can make you a winning trader! Without learning technical analysis, you should forget about trading!