The 10 and 20 SMA with 200 SMA foreign exchange strategy is a simple and easy fx trading technique which is quite simple to comprehend and implement.
There two major reasons why the moving averages are helpful in the foreign exchange:
- Moving averages assist forex traders to detect trend.
- Identify adjustments in trend.
With this swing trading technique, when the quicker SMA, 10, bypasses the slower SMA 20, it frequently indicates a trend adjustment.
So when you observer 10 SMA intersect 20 SMA to the upper side then you realize there is a higher chance that the market condition is in an uptrend.
If 10 SMA bypasses 20 SMA to the downward side, then you realize there is a great possibility that the market condition is in a downward trend.
- All currency pairs works perfectly with this trading strategy.
- The recommended time frame for utilizing this strategy is of your choosing.
- 10 SMA, 20 SMA and 200 SMA are the only required forex indicators for utilizing this strategy.
Exchanging Strategy Rules
- Highly recommends sticking to the daily time frame and the four time period.
- After the rapid 10 SMA bypasses the slower SMA 20 find for these reversal bars to begin your trading.
- For auctioning, observe for the bluff reversal bars and position auction stop order five pips beneath the low of that bluff reversal bars. For purchasing, observe vigorous reversal bars and position your purchase stop or purchase stop order five pips higher up the high of that vigorous reversal bars.
- Position your stop-loss higher up five pips the high of the starting reversal bars.
- Establish your take-gain to three times what you risked or search for prior swing high or low and utilize these price levels as your take-gain aim.
How to Utilize 200 SMA with this FX Strategy
Now as an additional measure to safeguard you only exchange with the major trend, the 200 SMA can be utilized as advance filter.
The 200 SMA can only take long positions If 10 SMA and 20 SMA are higher up. It can only take short positions if 10 SMA and 20SMA are beneath.
Utilize this strategy at your own risk. WindsorForex.com cannot be responsible for any losses associated with using any strategy presented on the site. It’s not recommended to use this strategy on the real account without testing it on demo first.