Analyzing The Forex Market With Indicators

[greencat]

Many things have been said about moving averages, both pro and con. Moving averages are lagging indicators. But they can give us market direction. By having market direction or trend trading your chance for success increases dramatically. As you will see, trends will end but the trick to trading is knowing when the odds are favorable for trading.

Using a moving average based trading system should be done on the 15 minute or higher charts for a resonable reading. We also want to watch for higher highs, higher lows, and lower highs, lower lows. Combine the two and some serious pips await the trader.

My first set of moving averages are the 21 EMA and the 55 EMA. What I am looking for is the current trend. The chart provides exactly what I am seeing.

[greencat]

I drop down to the 15 minute chart and add and 5 and 8 EMS. Watching for the bounce offs to get entry points. You must wait for the candle to close.

[greencat]

Using the 21 and 55 EMA's gives us the trend. The bounce off gives us the entry. The stop loss should be set at the last high or low. Take profit can be added add different points. Then its a mteer of letting it do its thing. Check on it and if 1st target is hot set stop loss just below entry of a few pips profit beloe entry in case it reverses. That is very important. Once this is acheived its not much to do until it sets up again.

[greencat]

I added chart the 4 hour and underlined higher highs and higher lows. And lower highs and lower lows. This gives direction to trading. The square area is undeceided making it a no trade zone.

[greencat]

Here I added the STO looking for higher highs and higher lows or vice versus to aid my chances of making a big play.

Trade smart and WIN BIG