Best Moving Average Trading Strategy (MUST KNOW)

hey guys so in this video we will show you our key moving average trading strategy that will help take your trading to the next level make sure to click the subscribe button and to hit the notifications bell so that you know exactly when we release new content so from looking at the comments a topic that has been requested many times is how to use moving averages also right now comment below and tell us what topics you want us to cover as we always look at the comments to decide what to create next so first what are moving averages by definition the moving average is an indicator that is applied to your charts that helps smooth out price by removing the swings and fluctuations surrounding the price movement in question now don't think too hard about this because the key way we show you how to use moving averages is more important so the specific moving average we use is the exponential moving average with the length of 50 meaning the 50 EMA so from whichever charting and trading platform you are using go to your indicators find the exponential moving average and add it to your charts set the length to 50 now this is a very key point you must understand when using indicators we never use indicators on their own for trade analysis or trade entries we only use them to confirm and support what we have already established with price action so why do we use moving averages the first reason is because moving averages can act as supporting evidence of a bullish market a bearish market or a sideways market when the 50 EMA is above price it represents a possible bearish market and a downtrend when the 50 EMA is below price it represents a possible polish market and an uptrend when the 50 EMA is going right through price it represents a directionless sideways market or a period of consolidation the second reason we use moving averages is because a break through the moving average line can signal a possible trend change notice how we were in a downtrend and once price broke through the moving average line we had a trend change to an uptrend same thing in an uptrend once price broke through the moving average line a trend change occurred to a downtrend third reason we use moving averages is because they can act as a form of support or resistance price is in a bullish uptrend and if you get price action through candlestick formations at the 50 EMA it shows that price is indeed reacting to the 50 EMA as support and can signal a possible trend continuation long now in the opposite direction prices in a bearish downtrend and if you get price action through candlestick formations at the 50 EMA it shows that price is indeed reacting to the 50 EMA and can signal a possible trend continuation short now the most important point in regards to these concepts is that we use them as ideologies and not the law because again we do not use moving averages on their own for trade entries we pair them with what we have already established with price action to increase trade quality now let's get into how to use the 50 EMA in your trading process now we're going to add the usage of the 50 EMA on top of all past concepts we have showed you in previous videos so there are two ways we use the 50 ma inside of our trading which is one for Trend trading and two for reversal trading so let's start with the first which is trench rating so here is the daily time frame first you would have established that this is a clear moving up trend as price was making higher highs and higher lows so you want to trade with the moving up trend next you would have identified your area of support through these two reactions here now what made this level even better and an area of confluence is that the 50 EMA was also right at this area as well now as price was approaching this area you were looking to see if there would be price action occurring at this area before deciding on a trade or not what you got was two great candlestick formations where the wicks were sticking out and an inside bar which shows a reaction to the area of support and the 50 EMA again a reaction does not equal a trade as price can stall at the 50 EMA and support level and still break right through as a reminder even though your big picture trend is an uptrend your short-term trend is a downtrend and can continue on so you need confirmation that the short-term downtrend is over so just like in our previous video what you do is you put a trendline on top of this moving downtrend and wait for a breakthrough the trendline and lets you have that break you start looking for long entries now for us we always like to look for more detail and confirmation inside of this immediate downtrend so let's put both the daily and four-hour time frame side-by-side so here on the left is your daily timeframe and here on the right is your four-hour time frame here's your daily support level and here is the same support level here's your daily trendline and here is your same trendline now on this time frame you can clearly see all the rejections of the trendline before you had a very bullish candle that broke through the trendline and more importantly a closed outside of the trendline the massive bullish candle shows up buyers actually stepped in and confirms the two candles on the daily time frame this is when you had confirmation that the short-term downtrend is over and that the bigger uptrend can continue you would then start looking for long trades through the lower time frames with a breakout or a momentum play as your directional bias is now confirmed the most important part is that this all occurred after the reaction to the area of confluence because you needed traders to enter long and short traders to close their positions to create upwards momentum so moving on so here on the daily timeframe you have a clear moving uptrend as price is making higher highs and higher lows so you want to trade with the moving uptrend next you had your very key level of support and think back to our video about support and resistance levels where we talked about evaluating the quality of a level based on how many traits it has and this level has a few first you had multiple reactions to the level second this level acted as both support and resistance and third it was recently respected here meaning that this point is still valid in a recent time period all these factors make this a very key level next you have this very key trendline with multiple reactions to it in the past here was your access point an area of high confluence as you had your key trendline your key support level and the 50 EMA all intersecting perfectly now let's zoom in a bit to get a better look at the area of focus was approaching this access point an area of high confluence you were watching to see if you would get price action forming and reacting to this level what you got were these two great candlesticks with the wicks sticking out but again still no trade because a reaction does not equal a trade as price can stall and still break right through as you should already know you then put your trendline above the current moving downtrend and once you had your breakthrough the short-term trend line like this it confirms all your previous analysis and that the short-term downtrend is over and that the bigger uptrend can continue you then start looking for intraday entries through a breakout or momentum play now for us we like to take earlier entries so what we do is we put a tight trendline onto this immediate downtrend like this and go to the four-hour time frame and look for a trend change to take an earlier and tighter entry so let's put the four hour time frame beside the daily timeframe so here on the left is your daily time frame and here on the right is your four-hour time frame here's the daily support level here's the same support level here's the daily trendline here's the same trendline here's the short-term trend line here's the same short-term trend line here's the access point here's the same access point and once you had your breakthrough the short-term trend line your directional bias is confirmed as long and you would go to the lower timeframes and start looking for long entries to breakouts and momentum plays now as a reminder the most important part is that this all occurred after reaching and reacting to an area of high confluence as you needed all those different schools of traders to enter the market in order to create upwards momentum and what you are doing is riding the momentum or your trade so now that you understand trend trading with the 50 EMA let's move on to reversal trading and before we continue if you're enjoying us releasing new videos more often make sure to hit the thumbs up button and to comment below right now with your questions and thoughts as this lets us know you want more videos so here on the daily timeframe you first had your trendline drawn right here you had your clear moving uptrend through higher highs and higher lows before you had your trend line break and a break through the 50 EMA which was your first signal of a possible trend change price that made a lower low which was another signal of a trend change next here was your key resistance level that acted as both support and resistance in the past this here was then your access point where a key resistance and the 50 EMA both lined up now as price came up to this access point you had a picture-perfect very long with candle that reacted to both the key resistance level and the 50 EMA but again our reaction does not equal a trade short so what we do is we put a tight trendline in and go down to the four-hour time frame so let's put the daily and four-hour time frames side-by-side so here on the left is your daily time frame and here on the right is your four-hour time frame here is the resistance level on the daily time frame and here is the same resistance level on the four-hour time frame here's the daily long-term trend line here's the same long-term trend line here's the daily short-term trend line here's the same short-term trend line and here's your access point here's the same access point now once you had your break of the short-term trend line this shows that the pullback is over and once price made the lower lo you can start looking for short entries and start taking breakout or momentum entries through the lower timeframes as your directional bias is confirmed again the most important part was the big picture trend change through the break of the trend line combined with the pullback reaction to an area of high confluence so moving on now in this example we're going to take this up a notch and use the 50 EMA through the intraday time frames for a more aggressive early entry so here in the daily timeframe you had your clear moving downtrend as price was making lower highs and lower lows you then would have had your long-term trend line drawn in like this price then broke the trendline with a candle close outside of the trendline which is the first signal of a trend change and giving you a short-term bullish bias now your traditional entry using the previous strategy we showed you would look like this you would draw your key support level here because of these three points and wait for a pullback and rejection of this support level you would then put the short-term trend line above and once you had your breakout you would look for possible long entries and that would be perfectly fine now here's where we take it up a notch our entry into this trade came right at this break here but exclusively through the four-hour time frame so let's put the two timeframes side-by-side here in the left is your daily timeframe and here on the right is your four-hour time frame here's the daily long-term trend line here's the same long-term trend line this area here where the brachial candle occurred is the same area here on the four-hour timeframe but as you can see there's a lot more detail that we can see on this time frame so let's go through step by step what went through our mind one on the daily timeframe we noticed that price broke through the long-term trend line and had a candle close outside of the long-term trend line to give us our short term bullish directional bias - this here is already a current moving up trend as prices making higher highs and higher lows and we want to be trading with the uptrend momentum three here was your intraday support level as you had multiple reactions right here so you had it drawn in four here was your trend line because of these two points here and you had it drawn stretched out further five and the most important part you had your access point here an area of high confluence because the support level and the trend line and the 50 EMA and the backside of the long term trend line all intersect perfectly now as price approached this access point we were looking for price action which we got through these two great candlestick formations where the wicks were sticking out showing that price is indeed reacting to everything at this area of high confluence and all its traits you then put your very short-term trend line on top of the short-term pull back and once price broke out you go to the lower timeframes and start looking for breakout or momentum entries long as your directional bias is now confirmed remember that the most important part of this quick introductory was because of the long term trend line break on the daily with a candle close outside and then confirmed through the intraday price action entry again these concepts will continue to get deeper and deeper as we build on all past videos so make sure you are all caught up now if you want to learn more about our exact intraday entry strategies head on over to our website and watch trade calm so if you are enjoying this new format of more frequent video releases make sure to hit the thumbs up button and comment below right now and let us know your thoughts and questions as we love hearing from you all and it lets us know that you want more videos more often so thanks for watching and I'll see you in the next episode [Music] you

Channel: Wysetrade

Views: 1,931,593

Rating: 4.9609184 out of 5

Keywords: moving average, moving averages, moving average trading strategy, trading strategy, exponential moving average, price action, forex, stocks, wysetrade, day trading, swing trading, trading strategies, ema

Id: jdYNaE5GJ0k

Length: 14min 55sec (895 seconds)

Published: Sat Nov 09 2019