Tag: Moving Average - Page 2

Trading Strategy Based on Momentum Changes in Different Time Frames

Certainly the approaches to trade in the financial markets are numerous and varied. Many traders base their strategies on the fundamentals of supply and demand while others use more technical tools such as moving averages, price oscillators and other. In this article we study an interesting approach based on market momentum interpreted through the RSI indicator.

First of all we will indicate that the markets are indeed driven by changes in supply and demand. However, these changes are not always due to the publication of news and relevant market indicators or related events. Sometimes the markets move in one direction or another due to different factors that can not be predicted by fundamentals, such as a correction when a trend starts to run out. This is where certain indicators such as the RSI can be useful.

Hull Moving Average – Ultimate Guide

by rcanessa

Description of Hull moving average (HMA), a little-known type of moving average that almost eliminates lag in relation to price action compared to traditional moving averages.

A moving average over the price of a financial asset, such as a stock or currency pair, is a high-value trend indicator. It is possibly the most famous and widely used trading indicator of all.

Typically, the three most commonly used classic moving averages are as follows: simple, exponential, and weighted.

But today we are going to explain a little-known moving average, which is considered by many to be one of the best that exists.

It is the Hull moving average.

Perry Kaufman Adaptive Moving Average (KAMA)

by rcanessa

Hello to all our Forexdominion.com followers, today we bring you an article where we explain in detail a moving average indicator called KAMA.

This indicator was developed by Perry Kaufman, and is an adaptive moving average designed to take into account the volatility or “market noise”. The KAMA moving average approaches prices when price fluctuations are relatively small and noise is low. In addition, the KAMA will move away when price swings widen and follow prices from a greater distance. This trend following indicator can be used to identify the general trend, market inflection points, and to filter price movements.

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Vegas Trading Strategy With Moving Averages Tunnels

by rcanessa

A type of trading strategy that has been used for some years to trade successfully in the Forex market and with other financial instruments is based on moving averages tunnels such as the Vegas systems. In summary, these are discretionary systems for swing trading which are based on moving averages envelopes. To better understand how works this type of strategy we will explain in detail a system known as Vegas Wealth Builder.

The author of this strategy has defined the following steps for implementation:

Simple Forex Daytrading System

by rcanessa

The following is a simple trading system that uses only two indicators and has given good results. It can be used in any market, including Forex, precious metals and others. Of course, we recommend that before using this trading system to trade with real money, it must be evaluated on a demo account. You can check our list of Forex brokers to find one that satisfies your trading needs.

This trading strategy uses the following indicators:

Bar/candles daily chart.
SMA (Simple Moving Average) of 13 periods.
10-period RSI (Relative Strength Index), with a line at level 50.
Read more

Modified Exponential Moving Average (MEMA)

by rcanessa

There is no need to remember the amount of technical analysis tools currently available, however, it is curious how we end up resorting to the simplest of all, which are not other than moving averages. The truth is that despite its simplicity, the media provide us with a fairly reliable information about the direction the market is taking, serving as reference points to establish the possible levels of support or resistance.

The moving average MEMA (it is the acronyms of the Modified Exponential Moving Average) is a type of exponential moving average that presents a series of particularities with respect to the traditional EMA. In the present article we are going to talk about this analytical tool.

Momentum Trading Strategy in 4 hours charts

by rcanessa

This trading strategy is based on the famous moving averages tunnels strategy developed by Vegas. In this particular case it was developed for 4 hour charts on any trading instruments, but is used more regularly to trade currency pairs in the Forex market. Like other similar systems, the operation is quite simple as will be seen below:

Methodology of the trading system based on momentum and tunnels for 4 hour charts

1.) To start we create a weekly chart on the asset that we are analyzing, which can be a candlestick of bar chart. This chart should contain an exponential moving average of 21 periods (EMA 21) applied precisely to the average price [(H + L) / 2], and a simple moving average of 5 periods (SMA 5) also applied to the average price [ (H + L) / 2].

Skydive Trading System: A Lowry System Variation

by rcanessa

Introduction

The Skydive System is a trading system based in the strategy created by Scott Lowry (see the Lowry System), an American psychologist and trader that regularly speculate in the Futures market. Basically, this trading technique is based on the intersection of three exponential moving averages as shown in the image:

In the same way as happens with other similar trading strategies based on moving averages, in markets with low volatility and without a defined trend, the Skydive System often produce false signals. For that reason we can include a filter based in indicators like the MACD or the Williams %R.

This is a simple trading technique based in moving average crosses. It is based in the famous trading system developed by Scott Lowry, so is basically a trend follower strategy. For that reason is no recommended in markets that are moving in a range without a clear trend.

Lowry system – Trading system based on moving average crossovers

by rcanessa

What is the Lowry System? This is a trading technique developed by a trader named Scott Lowry and is based in moving averages crosses. Before starting the description of the strategy we will describe 3 basic concepts: Delphic Phenomenon (DF): This phenomenon occurs when the moving average of 18 periods and the moving average of 40 periods cross each other upwards (or … Read more

Vegas Tunnels Trading Strategy for 1 Hour Charts

by rcanessa

This is a trading system developed by Vegas to trade only in 1 hour price charts. Basically this trading technique is to open three equal positions (if the trading platform permits the trader can also open a position divided into three parts which can be closed independently). Another option is to divide the capital invested in the trade according to percentages, for example the first position corresponds to 50%, the second position to 25% and the third position to 25%. Each trader can decide how to work with each position.

It can be used in many markets, including Forex (any currency pair), precious metals (gold and silver), indices and other.

The methodology of this system is quite simple. Initially three exponential moving averages (EMA) are plotted on 1 hora chart:

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