🔴 This Moving Average Strategy Will Make You PROFITABLE INSTANTLY

welcome back to Trader DNA in this video we're going to share three effective ways to use the moving average indicator to generate accurate and reliable trade signals understanding moving averages is absolutely essential for every Trader no exceptions there's not a single successful Trader out there who doesn't have a solid grasp of how moving averages work similarly there isn't a fund manager operating in the Forex or stock markets who doesn't rely on this key indicator to guide their decisions simply put if you want to achieve success as a Trader you must fully understand moving averages that's

non-negotiable in this video I'll break it all down for you step by step by the time you've watched this video to the end you'll have a clear and accurate understanding of moving averages and how to use them effectively this will help you avoid unnecessary losses and maximize your trading profits you'll know exactly when to enter the market just like professional and successful Traders do so let's start with the basics what is a moving average a moving average is a simple yet powerful technical indicator that calculates the average closing price of an asset over a specific

period of time for example a 10 period moving average calculates the average closing price of the last 10 candles one of the main benefits of using a moving average is its ability to filter out Market noise allowing Traders is to focus on a clearer picture of the overall trend it's an invaluable tool for anyone serious about mastering the markets different types of moving averages are used to analyze different Trends in the market for instance a 200 period moving average is typically used to identify the long-term trend of an asset or Market it Smooths out the

price action over a longer period giving us a better understanding of the overall direction the market is moving on the other hand a 20 period moving average is more useful for determining short-term Trends as it reacts more quickly to recent price changes and provides a snapshot of the Market's current momentum some of the most commonly used moving averages are the 20 50 100 and 200 period averages these are widely recognized by Traders and investors alike in general moving averages serve the purpose of helping us identify the prevailing Trend in the market Market while also simplifying

the price action to make it easier to interpret now let's dive deeper into the specific ways moving averages can be used to make more informed and effective trading Decisions by understanding their practical applications you can better navigate the market and increase your chances of success the moving average is a versatile tool that primarily serves three main purposes in trading first it helps us identify the trend second moving averages are used to identify Trend changes third moving averages can be used to identify areas of support and resistance these three uses of the moving average are critical

for making more informed decisions and improving your overall trading strategy let's begin by understanding how to identify the trend using the moving average the moving average is a trend indicator so its primary function is to help us determine the direction of the market Market to do this there are three main techniques we can use first we look at the price versus the moving average the position of the price relative to the moving average can provide a clear indication of the Market's Trend um if the price is consistently above the moving average it signals that the

market is in an uptrend as logical Traders we want to trade with a trend so in this case we should focus on finding bu opportunities on the flip side if the price is below the moving average and has remained below it for an extended period it suggests that the market is in a downtrend in this scenario we should be looking for selling opportunities lastly in sideways or range bound markets the price tends to oscillate above and below the moving average without staying in one direction for long it moves like a pendulum switching positions frequently in

these situations it's best to avoid trading and wait for a clear Trend to form before entering the market um a simple and effective trick for improving your analysis is to use two moving averages with different period settings this way you can get a clearer picture of both the short-term and long-term trends in the market here's a simple example to illustrate this on this chart we have two moving averages the yellow line represents the 20 period moving average while the Blue Line represents the 200 period moving average the 20 period moving average is a short-term moving

average so it helps us identify the short-term trend of the market on the other hand the 200 period moving average is a long-term moving average giving us insight into the long-term Trend now let's temporarily ignore the 200 period moving average and focus solely on the 20 period moving average looking at this um we can see that whenever the price was above the 20 period moving average it was in an uptrend suggesting that we should be looking for buying opportunities conversely when the price was below the 20 period moving average it indicated a downtrend which would

lead us to focus on selling opportunities however upon closer inspection we can see that there wasn't much price movement during the downtrend periods now um if we bring the 200 period moving average back into the analysis we can observe that the price stayed above the 200 moving average throughout the the entire period this indicates that the market was in a long-term uptrend with this additional information we can conclude that selling during these down periods would have been risky as it would be going against the overall long-term Trend um here's another example to consider when we

zoom in on this section of the chart we notice that the price is moving around the 20 period moving average for an extended period this indicates that the price is in a short term sideways Trend as it's bouncing around the moving average without showing a clear upward or downward Direction however at the same time the price remains consistently above the 200 period moving average this suggests that from a longterm perspective the price is in an uptrend so we're dealing with a sideways Trend in the short term but with a long-term upward bias in such a

situation we have a couple of options we could avoid trading altogether due to the lack of clear Direction in the sideways Market or we could place buy trades near the lower end of the range where the price tends to find support what we definitely shouldn't do is enter sell trades at the upper end of the range because that would go against the long-term upward Trend by using two moving averages you won't necessarily get better trade opportunities but it will certainly help you avoid making poor decisions it's all about aligning your trades with the overall Market

Market Trend and using the right information to steer clear of risky moves if you're enjoying this video so far make sure to like it and subscribe to our Channel or you never miss any of our future videos second let's talk about the moving average slope the slope of the moving average is another key factor that gives us valuable insight into the strength of a trend when the market is in an uptrend the moving average will slope upwards in a strong uptrend the slope of the moving average will be steep almost reaching a 45° angle on

the other hand in a weak uptrend the slope will be much more gradual indicating that the upward momentum is not as strong the same concept applies to downtrends in a strong downtrend the moving average will have a steep downward slope again near a 45° angle reflecting the strength of the selling pressure in a weak downtrend the downward slope will be more gentle suggesting that the downward momentum is losing steam this information is incredibly useful because it helps us gauge the strength of the trend if the trend is strong uh we can afford to be more

aggressive in our entries taking advantage of the momentum however if the trend is weak we need to exercise more caution with our trades as the market May reverse or lack sufficient momentum to continue in the direction we want to trade third let's talk about using large versus small moving averages another effective way to identify the Market's trend is by using two moving averages and analyzing their relative positions for example we can plot a 50 period moving average and a 200 period moving average on the chart the 50 period moving average is referred to as the

smaller moving average while the 200 period moving average is the larger moving average um when the smaller moving average is above the larger moving average it indicates that the price is in an uptrend in this case we would focus on finding buying opportunities as the market is showing signs of upward momentum on the flip side when the smaller moving average is below the larger moving average it signals that the price is in a downtrend as logical Traders we would then look for selling opportunities during this time aligning our trades with the overall downward Trend this

method helps keep our trades in line with the prevailing Market Direction allowing us to make more informed and effective decisions so these were the three techniques that you can use to identify the trend using the moving average indicator now let's move on to learning how to use the moving average to identify potential Trend reversals to spot a trend reversal we have two primary techniques first price crossover as we discussed earlier during an uptrend the price tends to stay above the moving average and in a downtrend the price stays below the moving average by using this

same logic when the price crosses below the moving average from above it signals that the uptrend has come to an end and a downtrend is about to begin this crossover indicates a bearish reversal in price on the other hand when the price crosses above the moving average from below it suggests that the downtrend is over and a new uptrend is starting this crossover signals a bullish reversal however keep in mind that not all crossovers are reliable signals and many of them can turn out to be false signals to minimize the risk of these false signals

we can also use a moving average crossover strategy which typically involves waiting for confirmation from additional indicators or multiple moving averages to increase the reliability of the reversal signal a moving average crossover is one of the most popular ways to use the moving average indicator in trading to apply this strategy you need two moving averages with different period settings for example we can use the 50 period and 200 period moving averages as we did earlier previously we learned that in an uptrend the smaller moving average is positioned above the larger moving average conversely in a

downtrend the smaller moving average is below the larger moving average building on that logic whenever the smaller moving average crosses below the larger moving average it signals that the price has shifted from an uptrend to a downtrend this crossover indicates a bearish reversal suggesting that the market is likely to continue downward on the other hand when the smaller moving average crosses above the larger moving average it indicates that the price has shifted from a downtrend to an uptrend signaling a bullish reversal and suggesting that the market is likely to rise while these crossovers can be

powerful signals we don't recommend entering trades based solely on these reversals in instead you should combine them with other factors or indicators to make more informed and accurate trade decisions so these are the two main techniques you can use to identify Trend reversals with moving averages we are now moving on to one of the most important uses of the moving average identifying dynamic levels of support and resistance when we talk about support and resistance in traditional terms we refer to fixed price levels where the price is expected to reverse however moving averages can act as

dynamic levels of support and resistance meaning they adjust and move with the price action over time in an uptrend the price tends to stay above the moving average whenever the price pulls back to the moving average it often finds support there meaning that the price has a tendency to bounce off the moving average and continue moving higher this gives us a potential opportunity to enter buy trades near the moving average as the trend is still intact for example in this scenario the moving average provides support to the price on three separate occasions each time helping

to push the price back up by recognizing these Dynamic support levels we can better time our entries and align them with the prevailing Trend increasing our chances of success in the market on the other hand in a downtrend the price generally stays below the moving average whenever the price approaches the moving average it tends to face resistance this means that the price struggles to push above the moving average and instead reverses back downward in such a scenario we can look for selling opportunities near the moving average as the downtrend remains intact in fact in this

case the price encounters resistance at the moving average a total of five times this is how the moving average can act as a dynamic level of resistance guiding us to better identify potential areas for selling during a downtrend by observing these resistance levels we can make more informed decisions on when to enter trades aligning with the prevailing Market Direction and with that we've reached the end of this video throughout this video we've explored how to effectively use the moving average indicator in our trading strategies by now you should have a better understanding of how this

tool can help you make more informed decisions in the market if you found this video helpful please make sure to to hit the like button and subscribe to our channel so you won't miss out on any of our upcoming videos thanks for watching and I'll see you in the next one