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Moving averages strategy

One of the important elements of success in trading for traders is the development of a simple and straightforward strategy that will subsequently lead to financial success. Many participants try to develop such a strategy on their own, and it is important that its principles are clear and accessible to the most ordinary person.

We want to offer you an interesting and effective method, which is called “Sliding by average”. It allows you to analyze the chart and prices correctly and on this basis make the right choice to trade assets. The principle of the strategy is based on the analysis of two lines, called “Moving averages”.

These lines absolutely mimic the path of the chart, but do not show random bursts. The lines can be used to clearly determine in which direction the asset value is moving. This will allow you to observe the trend and create positions in the right direction. In this way, you will mainly make a profit.

Now the question arises, why are these two straight lines? This is because when one middle band crosses the second one, at that moment you receive a signal to enter a down or up position.

Moving averages – study the indicator settings

In order to apply the strategic steps in your trade, you will need a technical analysis window. You will see it on the Olymp Trade platform. You open this window and find exactly the chart you plan to work with. Our recommendations for choosing are the GBP USD, EUR USD and EUR JPY pairs. You can also choose gold. The best period for trading is the European session time (from 09:00 to 12:00 Moscow) or the American session time (from 15:00 to 19:00 Moscow). In moments of calm on the market it is better not to trade with a strategy. Such time is 20:00 to 08:00 Moscow time.

To start, open the chart for 1 minute:

In the list of indicators, which are free to access, you should click on Moving Average.

Enter the proposed conditions for this line (let’s call it “slow”):

  • Length = 60
  • Source = hl2
  • Offset = 0
  • Color: Blue

We put a moving line with such conditions on this chart:

  • Length = 5
  • Source = hl
  • Offset = 0
  • Color: Green

Receiving signals

From now on we will start trading. Let us remember that the green bar is fast and the blue bar is slow. When you cross these bands, you receive a signal to conclude positions. The conclusion can be oriented down or up. Open a trade for 5 minutes. This period is the best in terms of profit from the trend and without significant risk.

Conclude a down trade

If the green fast Moving Average line crosses the blue slow Moving Average line from top to bottom, it is time to open a position.

Concluding position on promotion

The minute the fast green line of Moving Average crosses the slow blue line of Moving Average from bottom to top, we open an option position to increase.

Concluding position on promotion

The minute the fast green line of Moving Average crosses the slow blue line of Moving Average from bottom to top, we open an option position to increase.

This way, you can quickly understand in the chart lines, catch those very positive moments for making positive deals on options.

 

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