There
are three moving averages that are commonly used by many traders to
determine the 50, 100 and 200-period moving average trend.
How
do traders use? Some use it as a price measure as expensive or cheap
is based on how much the price is from these moving averages, others
determine trend by identifying where the price is in relation to the
moving average, some also determine trend based on how these moving
averages are stacked. There are many variations of how the moving
average could be used to determine the trend direction. The key is to
try to be in tune with what most traders are thinking.
Trading
rules Three Moving average with binary arrow
Coming
from the idea of determining the trend direction depending on
whether the three moving averages agree, we will be basing our trend
direction on how the three moving averages are stacked. On a
long-term uptrend, the shorter moving average is generally higher
while the long moving average is usually lower. On a downtrend, the
moving average stack is reversed. We will connect exponential moving
averages .
After
determining trend and trade direction, we will identify the item. To
determine the entry, we will use the custom indicator binaryarrows.
This indicator conveniently prints an arrow when determining that the
price could reverse at a certain candle. however, we will not take
every arrow that appears. For the highest odds and best results,
there will only be held candlesticks with long wicks or pin bar
candle stick patterns.
Indicators:
50
simple moving (gold)
100
simple moving averagegreen)
200
simple moving (Brown)
binaryarrows
Time
frame: any
Currency
pair: any
Trading
Session: any
Buy
Moving
averages must be stacked accordingly:
50
EMA - top
100
EMA - Medium
200
EMA - bottom
The
price should go back to the area of 50 or 100
A
blue binaryarrow facing upwards should appear
The
matching blue binaryarrow candle must be a pin bar candle with wicks
at the bottom
Place
a market buy order at the confluence of the above rules
stop
Loss
Set
the stop loss a few pips below the blue binaryarrow
Make
a profit
Setting
the target to take profit at the most recent high swing usually
matches a red binaryarrow
Sell
Moving
averages must be stacked accordingly:
200
EMA - top
100
EMA - Medium
50
EMA - background
The
price should go back to the area of 50 or 100
A
red binaryarrow facing down should appear
The
matching red binaryarrow candle must be a pin bar candle with wicks
on the top
Place
a sell market order at the confluence of the above rules
Stop
Loss
Set
the stop loss a few pips above the red binaryarrow
Profit
Setting
the target to take profit at the most recent low swing usually
matches a blue binaryarrow.
In
the pictures exaples Three moving average with binary arrow.
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