Trading Three Moving Averages | Trading Pit | Forum

 
You must be logged in to post Login Register


Register? | Lost Your Password?

Search Forums:


 






Minimum search word length is 4 characters – Maximum search word length is 84 characters
Wildcard Usage:
*  matches any number of characters    %  matches exactly one character

Trading Three Moving Averages

No Tags
UserPost

5:38 am
June 27, 2013


John Smith

Member

posts 26

Moving averages (MAs) are one of the most simple yet the most popular technical indicators out there. Calculating a moving average is very simple and is simply the average of the closing prices of a currency pair or for that matter any security over a period of time. The timeframe for a MA is determined by the number of closing prices you want to include. Comparing the closing price with the MA can help you determine the trend, one of the most important things in trading.

Trading with two MAs can be really profitable. How about trading with three MAs? Believe it or not, some of the highly successful trading systems use three moving averages as it allows the market to be defined into three states; trend, uptrend or downtrend. Let's see how it works!

Now when we use three MAs, the moving average with the least number of periods is characterized as fast while the other two are characterized as medium and slow. So, these three MAs can be 5, 10 and 15. The 5 being fast, 10 medium and 15 the slow.

So when the fast MA is higher than the medium one and the medium one is higher than the slower one, the market is in an uptrend. Similarly, when the fast moving average is lower than the medium one and the medium one is lower than the slower one, the market is in a downtrend.

Now, when the three MAs are not lined up as fast to slow or slow to fast, you can safely say that the market is not in any trend.


3:22 pm
August 29, 2014


Muhammad Perkins

Member

posts 39

I completely agree Moving average is by far the best and also most used indicator alongside Bollinger Band and there are so many ways and methods to use it and its great the way you explained things. Every newbie should use it even if they not completely follow it at least use it as a guide.

No Tags

About the S M A R T P I P . C O M Forum

Forum Timezone: UTC -5

Most Users Ever Online: 18

Currently Online:
2 Guests

Currently Browsing this Topic:
1 Guest

Forum Stats:

Groups: 4
Forums: 6
Topics: 501
Posts: 777

Membership:

There are 5711 Members

There is 1 Admin

Top Posters:

Andrews Mentro – 126
Liz Gilbert – 91
Dirk Wellham – 81
Peter Toohey – 46
Jamal Mia – 42
Muhammad Perkins – 39

Recent New Members: Marcus North, Shaun Graf, Mumin Elmas, Greg Sharpe, Dirk Wellham, nazarudin nasib

Administrators: FXChris (80 Posts)