If you haven't already figured it out, the simple moving average is not an indicator you can use as a standalone trigger. The MetaTrader 4 platform allows you to pick the type of moving average by selecting it from the pop-up window that appears. While this sounds simple, keep in mind that in Forex trading simple things work best. Perhaps one of the simplest trading strategies of all is that of the moving average crossover. Then again, there is another problem which is connected with lagging. Some use them as their primary analytical tool, while others simply use them as a confidence builder to back up their investment decisions. As a result, a line with the same period is smoother and closer to the chart, and its signals are less dependent on the large but outdated values.
When calculating moving average strategies performances, better results appear if moving averages are used together with other indicators. The RSI (Relative Strength Index) is one of them. Adding an oscillator to such a strategy results in the best moving average strategy for intraday trading.
Step 1: What is the best moving average? EMA or SMA?
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Exponential Weighted Moving Average
Moving Average Cross Trading Strategy Moving Average Cross Forex trading strategy — is a simple system that is based on the cross of the two standard indicators — the fast EMA (exponential moving average) and the slow EMA. A forex trader can create a simple trading strategy to take advantage trading opportunities using just a few moving averages (MAs) or associated indicators. Moving averages are a frequently used technical indicator in forex trading, especially over 10, 50, , and periods. Moving Average Envelope One more strategy that incorporates the use of moving averages is known as an envelope. This strategy plots two bands around a moving average, staggered by a specific percentage rate. For example, in the chart below, a 5% envelope is placed around a day moving average.