| If you want to become a successful trader, you | | | | lower prices mean bargain prices for you if you wish |
| should immerse yourself completely in the subject in | | | | to accumulate long positions. |
| order to find your edge. In case, you are already a | | | | Moving averages (MAs) are one of the oldest, true |
| winning trader than you should know exactly what | | | | and tested indicators. The most widely used moving |
| your edge is. | | | | averages are the 50, 100 and 200 day MAs. |
| Even the advanced traders find it difficult to interpret | | | | Moving averages are essentially lagging indicators and |
| and trade the sharp moves often seen in the forex | | | | relate to the past price action. MAs can be used |
| markets. Learning to read and interpret price action | | | | effectively in intra day trading for entering and exiting |
| can be a huge advantage for you. | | | | positions in one way markets. |
| When the market is in a steep decline, one should be | | | | During times of sharp price moves, it becomes |
| careful to measure the reaction of the longs. You | | | | difficult for the traders to enter a position as |
| must try to know and understand if the move has | | | | retracements are far and few. This makes most of |
| the chance to turn into a rout. | | | | the traders confused and forces them to start taking |
| You should look at the reaction of the longs as soon | | | | arbitrary decisions. |
| as the rate begins to go south, this way you will be | | | | MAs can be used as dynamic resistance levels in such |
| able to determine if the market is sitting on a large | | | | situations. This can give better results than the static |
| number of long positions and whether traders want | | | | support/resistance levels used by majority of the |
| to dump their positions. In case of a spike followed | | | | traders. |
| by a sharp V recovery, you should avoid shorting the | | | | The advantages of using MAs this way gives you |
| pair. | | | | dynamic levels to trade off and gauge price action. |
| More buyers entering the market at lower levels tells | | | | MAs can help you avoid using arbitrary levels when |
| you that the market is not heavily long and traders | | | | you should take profit. |
| are seeing it as an opportunity to buy low. These | | | | |