Simple Moving Average
This is one of the most frequently used indicator for charting any time frame. Simple moving average or SMA is actually adding up the total no. of currency price and divide by the total no. currency time frame. For example 10 SMA meaning 10 timeframe of the selected chart, add all the 10 currency price together, then divide by 10 to get the average, thus we call it simple moving average. All the weight age of the last 10 timeframe are equal.
9, 18, 50 and 200
Continuous SMA will show the trend for the currency for the last few designated timeframe. Commonly used timeframe are 9 and 18 together with 50 and 200. Both are used in pairs to show the short term movement and long term movement. Crossing of 9 and 18 SMA are commonly refer to start of a up trend or down trend, while crossing of 50 and 200 SMA will refer to end of a down trend or up trend.
SMA on high and low
This indicator can also applied to daily or hourly high and low prices. Especially useful when setting the profit target and stop loss when trading channel and trending market. With high SMA and Low SMA, you can easily see a channel of upper limits and lower limits. Similar to Bollilinger Bands but are average base on last few high or low price instead.
Use together with Relative Strength Index (RSI)
When using this indicator with RSI, it can indicate the point of reversal for a trend. RSI peaks at 20 and 80 value, will show sign of weakening of the trend with SMA changing direction. By applying trade executing when the indicator show changing trend, trader can earn huge profits if enter the market early when the trend begin to change.
SMA with Open and Close
Some trader uses the open and close price as a time indicator of the trend for that day or hour. Will simple moving average as a median point line, currency that opens with gap in their open and close (previous time frame), below or above the median point will indicate a possible increase/decrease of the price due to news or fundamental influence. This is a great catch for automated trading.
Moving Average Convergence-Divergence (MACD) = SMA (Y) – SMA (X)
This indicator take 2 simple moving average with different timeframe, by subtracting the short and the long timeframe indicator, it show an momentum on the currency trend. Sign of entering trades are when the 2 different indicator cross over each other or cross over the zero line. This will indicate the beginning of trend and the ongoing of the trend respectively. If use wisely, traders can enter a lot of profitable trades during strong fundamental backing of the currency.
Note: MACD uses exponential moving average and in this articles is simply for easiler understanding. Trader are to check the correct algorithm of the indicator prior to using it for his trading purpose.
source http://www.articlerich.com/Article/Applying-simple-moving-average-to-your-Currency-trading-software/2069670
A practical guide to trading the foreign exchange marketThe Ed Ponsi Forex Playbook offers a visual approach to learning specific trading strategies and identifying profitable trading opportunities in the Forex arena. Page by page, it skillfully describes strategies for long-term trading, swing trading, and day trading in a clear, easy-to-understand manner.
Written by the author of the hugely successful Forex Patterns and Probabilities, The Ed Ponsi Forex Playbook takes the entire concept of Forex education to a new level. The author raises the bar with this ambitious work, presenting fresh new strategies and concepts. Ponsi uses clever analogies and comparisons to make his explanations crystal clear.
- With Ponsi as your "coach", the book employs sports analogies to show you, his players, the way to victory on the Forex playing field
- Strips away the mystery, showing exactly how successful Forex traders make money
- Explains complex financial concepts in ways that the average person can understand
- Provides not only useful information, but actionable information to the Forex trader
Editorial Reviews
From the Back Cover
Praise for The Ed Ponsi Forex Playbook"The Ed Ponsi Forex Playbook
contains both the offensive and defensive plays that will keep traders
profitable and safe. Those who pick up this fascinating read will not
put it down until they have finished."
—Steve H. Hanke, Professor of Applied Economics, The Johns Hopkins University
"Ed covers all of the bases in this book. It's powerful, practical, and profitable advice that you can use right now. From start to finish, the book is packed with information that can help any trader extract profits from the most exciting market in the world."
—Rob Booker, independent trader, author of Adventures of a Currency Trader
"Ed Ponsi has scored again! This book doesn't just teach you how to win the trading game; it shows you how to win big. If you want to bank consistent profits in the forex market, read this book from cover to cover."
—Mario Singh, CEO, FX1 Academy
"Exceptionally unique and useful to traders of all skill levels, this book is a wealth of actionable trading approaches from one of the giants in forex education and analysis."
—James Chen, CTA, CMT, Chief Technical Strategist at FX Solutions, author of Essentials of Foreign Exchange Trading (Wiley)
An easy-to-understand visual guide to trading the foreign exchange market
Written by the author of the hugely successful Forex Patterns and Probabilities, The Ed Ponsi Forex Playbook offers a visual approach to learning successful trading strategies and identifying profitable trading opportunities in the Forex arena.
In Part I, "Training Camp," Ponsi provides basic but vital information to lay the groundwork for your success. In the next part, "Scoring Points," he delves into more advanced trading concepts. Part III, "Winning the Championship," deals with specific techniques that will give your trading an edge. Part IV, "Commitment to Excellence," presents more advanced money-making trading concepts, and in the final section, "Staying in Shape," you will learn which situations to avoid in order to enjoy a long and successful trading career.
The foreign exchange market is the most actively traded market in the world, and Ed Ponsi is world-renowned as one of the foremost educators in this field.
—Steve H. Hanke, Professor of Applied Economics, The Johns Hopkins University
"Ed covers all of the bases in this book. It's powerful, practical, and profitable advice that you can use right now. From start to finish, the book is packed with information that can help any trader extract profits from the most exciting market in the world."
—Rob Booker, independent trader, author of Adventures of a Currency Trader
"Ed Ponsi has scored again! This book doesn't just teach you how to win the trading game; it shows you how to win big. If you want to bank consistent profits in the forex market, read this book from cover to cover."
—Mario Singh, CEO, FX1 Academy
"Exceptionally unique and useful to traders of all skill levels, this book is a wealth of actionable trading approaches from one of the giants in forex education and analysis."
—James Chen, CTA, CMT, Chief Technical Strategist at FX Solutions, author of Essentials of Foreign Exchange Trading (Wiley)
An easy-to-understand visual guide to trading the foreign exchange market
Written by the author of the hugely successful Forex Patterns and Probabilities, The Ed Ponsi Forex Playbook offers a visual approach to learning successful trading strategies and identifying profitable trading opportunities in the Forex arena.
In Part I, "Training Camp," Ponsi provides basic but vital information to lay the groundwork for your success. In the next part, "Scoring Points," he delves into more advanced trading concepts. Part III, "Winning the Championship," deals with specific techniques that will give your trading an edge. Part IV, "Commitment to Excellence," presents more advanced money-making trading concepts, and in the final section, "Staying in Shape," you will learn which situations to avoid in order to enjoy a long and successful trading career.
The foreign exchange market is the most actively traded market in the world, and Ed Ponsi is world-renowned as one of the foremost educators in this field.
About the Author
Ed Ponsi is the President of FXEducator.com. As an experienced professional trader, he has advised hedge funds, institutional traders, and individuals of all levels of skill and experience. Ponsi has made numerous television appearances on CNBC, Bloomberg, CNN, the BBC, Fox Business News, and ForexTV, and has been profiled in magazines such as Technical Analysis of Stocks and Commodities and Traders Journal. His dynamic and humorous style sets him apart from the "suit and tie crowd." Ponsi is also the author of Forex Patterns and Probabilities (Wiley), a top-selling book on currency trading, and has a popular DVD series, FXEducator: Forex Trading with Ed Ponsi.
No comments:
Post a Comment