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Generating Trading Signal Using Moving Average

Let us note with the picture below. This is the image of the same article before. Show my goals is to refresh the memory, but also because the topic this time we are associated with the signal trading.

The Chart over me is a perfect crossing because obviously have the line third almost simultaneously, or nearly at one point (note that I give the line vertical red). The pattern on the chart EURUSD (H1) occur over the January 09, 2009 at 15:00 hours GMT.

Often the pair that showed a pattern like this will be a big bang (or a big boom, for the uptrend). Note the blue line cut from the top of the red, yellow lines and cut them from the top also. So that means trading signals have been given (short trading).

You may ask if the chart pattern such as this valid? Or how often have a pattern like this? Well let's look at the pictures below, and your task is to find patterns in metatrader.

The graph above is GBPUSD H1. Note the third line have the most at one point. This pattern occurred on 19 January 2009 hours 12:00 (GMT).

The graph above is the EURUSD H1. Note the yellow line cut two red-blue line, and then have the second line was some time afterwards. This pattern occurred on 19 January 2009 hours 20:00 (GMT).

The graph above is GBPUSD H1. Note the second line have the blue-red, and some time and then cut the two yellow-red-blue line. This pattern occurred on January 26 2009 hours 09:00 (GMT).

The chart EURUSD H1 is over. Note the third line blue-red-yellow, have the most at one point. This pattern occurred on January 26 2009 hours 12:00 (GMT).

That's it ..! and many more patterns like that if you want to take the time to do back-testing. In all time frame there is always this pattern. And I deliberately show graphs of the patterns that occur in the course of this month (January 09) and from H1 TF.

If you ask how much profit potential offered by this pattern, then the answer to which depends on the TF patterns appear. Clear that profit of the larger TF is greater potential. Please measure to reduce the high and low according to its consideration of you.

If you are still confused with the application pattern crossing the line 3, may be 3 of the following rules will be able to help.

First: Make sure the blue line and each other have the red line.

Second: Make sure at this time candle close above or below the crossing point. That is close to the crossing point up-trend and close under the crossing point if the downtrend. Caution should not rush even if entry conditions are met.

Third: Wait until the yellow line also cut the second line (red and blue). Can be the cross of yellow line does not happens at one point with cross both red and blue lines. It is not always form a perfect pattern. If so, use the blue line as the reference. This means that yellow line should have been cut off the blue line, then the trading signal generated much greater level of probability.
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