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Forex moving average crossover strategy...!!
all right I want to go over a strategy that I learned from Greg Michalowski he's fxdd vice president and chief currency and trading analyst he also has a book out called attacking currency trends you can find a book at attacking currency trends calm the strategy is using moving averages it's using two moving averages I'm going to be using 100 bar moving average and the 200 bar moving average I'm using simple moving averages the blue is my hundred and green is my 200 basically if price is above your hundred it's showing you that the market is bullish the bullish bias and if it's below it's showing you that you got a bearish bias and your 200 confirms that it's bullish or bias so what we do here we're looking at this trend here we've been up in an uptrend for a little while and now price breaks this 100 bar moving average we want to put a trade in to go short okay your risk is going to be a little above your 100 bar moving average but the way I really trade it myself I go to your next level of support and resistance which is if you look right at the under bar moving average that was where the level of support and resistance was so as you can see the under bar moving average holds weight when it comes to holding support and resistance but I would move up to my next level of support and resistance and you find that level right here so I will put my stop in right there now it all depends what you can risk to put in you know for your your money management but right here you're risking this is a 55 pip risk and if that's too much for you you know you just have to decide if you should even get in a trade or where your risk should be you could put your stop like we say about 10 pips 10 20 pips above the 100 and then you know that if it comes back against you that you were wrong so basically if you were wrong you get out the markets not doing what you expected it to do so you get out of the trade okay but we're looking here we break this 100 bar moving average and when we broke the hundred bar moving average that was our trigger we got it and we put our stop loss in and then basically we hit this 200 and we tested that 200 bounced off it tested it again bounced down tested it again broke it a little bit and then finally took off the way I would play this trade out if I missed this move here and I wasn't able to get in I see that you know where we broke this 100 our hundred bar moving average so yeah I want to be in the trade long so what I do is I look at your fib levels I try to get back in on a pullback and if you're looking at your fib levels you'll see that you put your fib in here and then you'll see that this bounced right off at a thirty eight point two retracement level came down retraced at thirty eight point two and that's where I will get in you got to look at your candlesticks or something to give you an idea and at thirty eight point two is almost basically right where the two hundred our moving averages 200 bar moving average so I would put my stop a little bit above this I would put it actually at the next retracement level which would be my 50 or else you could put it above your hundred your hundreds another level of support okay you see you came down what it hit thirty eight point two that's the level that I really look at to get back in thirty eight point to bounce back down now some time markets don't always hit thirty eight point two so I'm not telling you that you can look at an area though you're looking at areas where there can be something happening I look at I call it like decision making areas so this is an area this is an area this is an area right here sixty one point eight fifty percent these are areas that you're looking at something to happen in the market and if it doesn't happen then again your analysis is wrong so you have to get out but um I'm going to remove this fib and show you now if you got out you didn't get input if you didn't get in look at this again here's what happens you go to texnic that swing high again and this swing low whereas the market go to 38.2 just a little bit above 38.2 once again you could get back in the market you put a stop loss a little bit above this 50% level because your first level that it returned that was 38.2 so your stops up here what are you risking on that you're risking about 27 pips not too much okay so you bounced off of here and you came down you following this 100 bar moving average let's get rid of that okay you followed that hundred bar moving average you followed that hundred bar moving average down there was no need for you to gather the trade until you saw something changing what changed well we hit the under bar moving average and here we broke it so maybe we got nervous and got out of the trade but the trade still continued down for a little bit more but you're you're good here you're out you see this is like a support level you see the market started ranging getting into a little range a little bit so here's your levels right here look like the market started doing a little range emotion so yeah you got out if you got out you come back to this area here and you look and you'll see we're back up to that hundred bar moving average now here's something that I learned from Greg inside here you're trading in between the goalposts he calls this because you're between these two posts like area which would be your hundred bar and your 200 bar so when you're in here together two's company three's a crowd somebody's got to go the two moving averages our friend our friends and price is not a friend of the moving averages so prices out of their price takes off prices gone it breaks this here's our trigger we get in when here's our confirmation we broke the two hundred and it was a big move here some news or something happen here so that made that move even bigger and in the market tried to correct itself came back here now you see you're sitting on this hundred bar moving average you tested this boom boom boom couple tests boom boom so there's no need for you to worry about this trade right now or get in this is confirming to you that this is strong level of support right here right with it's moving averages because it's bouncing off it and it can't break it okay and if you put your support and resistance lines and you can see once again right here that level lines right up with this 200 with this under bar moving average basically you got support and resistance in that area so yeah that's how I look at the market and that's how I trade the moving average based on the way that Greg has described it you could learn more by going to their site and there's webinars there where he talks about it and in his book he really talks about so you won't find this anywhere else but in his book about trading between the goalposts and I'm not able to explain it as well as him and you know but I trade it because I learned it and back tested it and followed it follow them for a while let's go to another chart and just look at it real quick okay you see right here same thing this is a ranging motion of the moving averages are tight together twisting with each other so it's not really a good time to trade but you're looking for an opportunity because when you see the market like this which you want to look for something to happen you're looking anticipating the trend so the moving averages started moving apart a little bit so now if you would have taken this right here you would have got stopped out but you're putting in temp it moves you take this again it comes down here you could have pried got out right here and got a small profit or how she got stopped out okay then the market came back tested 200 and then it came back up and then it tested you on it and broke it now if you look again in that range here's your support area there's that range area right there and that's your support and resistance area right here okay now once that level broke this up broke this hundred right here what we do is we put our stop we put our order in to get long to get short and we put our stop I will put my stop above this support in the resistance area but if it's too much for you put it above this first bar here and if still you can't do that then maybe you shouldn't be in the trade again but as I say you could put a 10 pip stop and then look here you break the hundred and then you break the 200 it tests the 200 for a little while after test at 200 it broke it went on down and in the market range for a little while hit 200 more bar moving average it was another chance for you to get short again and went down came back around tested to hunt 100 again another chance for you to get short again boom and then here we go it's the 200 again boom these were all reasons for you to stay in the trade no reason to get out of the trade it didn't break 2 to 100 so you want to get out if it breaks to 100 and you did get out and then down we come here again we're in the and that goalpost area again so you know something is going to happen so you look for something to happen okay but I don't have time to really explain everything the way that Greg would but you can go there and find webinars and learn all about that strategy and I like using it it's real simple and real to the point so other than that I hope it helps somebody out and if you need to learn more go to fxdd comm and see some of the webinars ok thanks a lot god bless
