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TOP FOREX BROKERS REVIEW

THE INTERNET'S MOST COMPREHENSIVE LIST OF ONLINE FOREX BROKERS AND FOREX REVIEWS. 

Use Moving Averages to Find the Trend

Determining the trend of the currency pair is the best way to use moving averages in the forex
market. The way to go is to plot a graph of the moving average taking a period of your choice and
one that suits the type of deal you are looking for. If the price of the currency pair tends to stay
above the moving average, the trend seems to be upward. Similarly, if the price is on the lower side
of the moving average, it indicates a downward trend. But the main problem with moving average is

that it is too simplistic which can, in turn, backfire due to sudden surges in prices. This is a fake

movement. Here, due to some news that might have come out, the price increased but the
downward trend of the pair continues and hence leads to a loss if you invest. What can help you
avoid this is plot more than one graph for the averages using different time periods. This helps to

identify fake movement which can, in turn, save you some money. The two graphs will have
different moving averages which will give you two moving averages which can be then extrapolated

to find a trend. The knowledge of trend lines, as well as this, can help you determine whether you
should short a currency or go long with it. Using more and more moving averages can help you
further to determine the trend accurately.

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