{"id":9580,"date":"2022-10-12T08:00:36","date_gmt":"2022-10-12T08:00:36","guid":{"rendered":"https:\/\/mdr.foobrdigital.com\/?p=9580"},"modified":"2022-10-12T08:00:36","modified_gmt":"2022-10-12T08:00:36","slug":"how-to-use-moving-averages-to-find-the-trend","status":"publish","type":"post","link":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/2022\/10\/12\/how-to-use-moving-averages-to-find-the-trend\/","title":{"rendered":"How to Use Moving Averages to Find the Trend"},"content":{"rendered":"\n

One sweet way to use\u00a0moving averages\u00a0is to help you\u00a0determine the trend<\/strong>.<\/p>\n\n\n\n

The simplest way is to just plot a single moving average on the chart<\/strong>.<\/p>\n\n\n\n

When price action tends to stay above the moving average, it signals that price is in a general UPTREND.<\/strong><\/p>\n\n\n\n

If price action tends to stay below the moving average, then it indicates that it is in a DOWNTREND.<\/strong><\/p>\n\n\n\n

\"Use<\/a><\/figure>\n\n\n\n

The problem with this is that it\u2019s too simplistic.<\/strong><\/p>\n\n\n\n

Let\u2019s say that USD\/JPY has been in a downtrend, but a news report comes out causing it to surge higher.<\/p>\n\n\n\n

\"Moving<\/a><\/figure>\n\n\n\n

You see that the price is now ABOVE the moving average. You think to yourself:<\/p>\n\n\n\n

\u201cHmmm\u2026 It looks like this pair is about to shift direction. Time to buy this suckerrrr!<\/strong>\u201d<\/p>\n\n\n\n

So you do just that. You buy a billion units cause you\u2019re confident that USD\/JPY is going to go up.<\/p>\n\n\n\n

\"Fakeout!<\/a><\/figure>\n\n\n\n

Bammm! You get faked out!<\/p>\n\n\n\n

As it turns out, traders just reacted to the news but the trend continued and the price kept heading lower!<\/p>\n\n\n\n

What some traders do, and what we suggest you do as well, is that they plot a couple of moving averages on their charts instead of just ONE<\/strong>.<\/p>\n\n\n\n

This gives them a clearer signal of whether the pair is trending up or down depending on the order of the moving averages.<\/p>\n\n\n\n

Let us explain.<\/p>\n\n\n\n

In an uptrend, the \u201cfaster\u201d moving average should be above the \u201cslower\u201d moving average, and for a downtrend, vice versa.<\/p>\n\n\n\n

For example, let\u2019s say we have two MAs: the 10-period MA and the 20-period MA. On your chart, it would look like this:<\/p>\n\n\n\n

\"Faster<\/a><\/figure>\n\n\n\n

Above is a daily chart of USD\/JPY<\/strong>.<\/p>\n\n\n\n

Throughout the uptrend, the 10\u00a0SMA\u00a0is above the 20 SMA.<\/p>\n\n\n\n

As you can see, you can use\u00a0moving averages\u00a0to help show whether a pair is trending up or down.<\/p>\n\n\n\n

By combining this with your knowledge of trend lines, this can help you decide whether to go long or short a\u00a0currency pair.<\/p>\n\n\n\n

You can also try putting more than two moving averages<\/strong> on your chart.<\/p>\n\n\n\n

Just as long as lines are in order (faster MA over slower MA in an uptrend, slower MA over faster MA in a downtrend), then you can tell whether the pair is in an uptrend or in a downtrend.<\/p>\n","protected":false},"excerpt":{"rendered":"

One sweet way to use\u00a0moving averages\u00a0is to help you\u00a0determine the trend. The simplest way is to just plot a single moving average on the chart. When price action tends to stay above the moving average, it signals that price is in a general UPTREND. If price action tends to stay below the moving average, then it indicates […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[869],"tags":[],"_links":{"self":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9580"}],"collection":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/comments?post=9580"}],"version-history":[{"count":0,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9580\/revisions"}],"wp:attachment":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/media?parent=9580"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/categories?post=9580"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/tags?post=9580"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}