How to trade Forex using the Moving Average crossing
Now you already know how to determine a trend or trend in price movements using the Moving Average (MA) by plotting several moving averages into a chart. But you also have to know that moving averages can be used to determine whether a trend will end and or reversal.
And all you have to do is plot a pair of moving average (faster & slower) then wait for the crossing.If there is a cross between the two moving averages then this is a signal of a reversal or formation of a new trend. And will give you a good value to enter the market. When you get a good entry price, the opportunity to get PIPS will be even greater.
Okay, let’s clarify about this moving average crossing with a chart of price movements of the following USD / JPY currency pairs.
In April to July the currency pair moves upward (uptrend) and reaches its peak at 124.00 before slowly starting to fall. In mid-July the price began to fall with the signal in the form of a moving average crossover with 10 high schools under 20 high schools. After July the currency pair tends to go down (downtrend) and if you open a SELL position shortly after the cross between 10 high schools and 20 high schools is established, you can be sure you will get a lot of profit.
Speaking of profits, the thing that can be conveyed is that you do not apply risk management ( take profit and cut loss ) so that capital is not lost because there is no forecast that is 100% correct while not being a loser (looser).