Many a time, we are complicated our life in trading with multiple confirmation indicators and forget to keep things simple. In this deck , I will try to simplify what we see in a trade and hope it will help you in your trading.

1. Above Average –
The Moving Average
CONTENT CREATED BY:
JASON WANG
Content is copyrighted © by Author and no part of content should be redistributed without prior consent.
Photo Credit: RSAF

2. Content
 Introduction to Forex Market Movements
 Timing of Trade
 Market Phases
 Introduction to Moving Average(s)
 Types of Moving Average(s)
 Effectiveness of Moving Average(s)
 Take note
 Usage Application
 Management of Trades
 Conclusion
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3. FOREX MOVEMENTS
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4. Forex Market Movement
Most of the market falls in between these two :
 Trending
 Ranging
As a result , traders develop the following trading styles :
1. Range Trading
2. Breakout Trading
3. Trend Trading
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5. Timing Of trade
How to determine if we should be trading Range/Breakout / trend for short term
traders?
1. News event (Current and Future)
2. Timing of Trade
3. Bigger Time frame( Daily, Weekly ,Monthly)
During inactive hours of trading , when news occurs or breakout occurs, the most
effective way of trading would be range trading. Sell near resistance, buy near
support (of a bigger timeframe).
Events ahead such as interest rate announcement would cause the respective
currency pairs to be in ranging play.
A breakout often happen after big economic news events after a period of
ranging or during very active trading hours which leads to a trending market.
Lastly ,daily chart and above time frame is very important to determine the range
of trade.
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6. Market Phases
This shows market is moving in
both trending and non
trending(ranging) manner due
to the different phases of the
market .
Each consolidation is a phase
of accumulation or distribution.
Thus , one has to identify by
reviewing the previous
movement of the price.
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Image credit: Sonic(R)

7. Moving Average(s)
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8. Moving Average
 Average of prices at close over a period of time to avoid
outliners/price spike
 Indicates the general trend of movement
 It serves as a floating resistance and support
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9. Types of MA
 Simple Moving Average (sma)
 Exponential Moving Average (ema)
 Weighted Moving Average(wma)
Both Exponential and Weighted Moving average put in higher
weightage in the recent price movement .
We prefer the use
of SMA as it can be
applied in any
platform.
Also, EMA and SMA
could be the same
by adjusting the
number of day
used.
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10. 10Periods of MA
We would prefer at least 2 moving averages with different time period to detect shorter
term movements over the longer term movements.

11. Does time frame affects?
 Further optimisation of moving average could be done based on
currency pairs, time frame to find a best fit.
 However , there would not be a perfect fit as deviation would
always happened.
 Higher time frame will take on the dominancy of the trend thus
always obey the higher time frame
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12. Pros and Cons
Advantage
- Identify Trend and reversal
- Setting up Entry, Exit and SL
Disadvantage
- Not suitable for range
- Slower than Price action
- Can easily trigger SL
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Solution
- Bollinger Bands
- Fibonacci
- Support/Resistance
- Sufficient stop loss
- Higher Time Frame
Others
- Price action
- Pattern
- Other indicators

13. Things to look out for
 Gradients of the Sloping
 Price and MA
 Support and Resistance
 The highest point (HP) and the lowest point (LP)
 MA movement (cross over etc.)
 Distance between MA(Gaps)
 Wave
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14. Basic Applications -
Moving Averages
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15. 15
Line Graph
Candle Graph
OHLC graph
Typical Application on Chart
Image credit: ta-guru.com
Image credit: charts.com
Image credit: simpletradingideas.com

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Market Phases with
Moving Average
Individual Image credit: StageAnalysis.com

17. Common Application
 Buy / Sell during cross over of two moving averages.
Is this wrong?
No, when you are in a strong trend.
When will this fail?
During initial cross over stage where there will be a lot of
whipsaw around the cross over.
What to improve?
Buy / Sell after moving averages has cross over and price
has retrace back to the moving average to retest it and
form a higher low(uptrend formation) / lower high
(downtrend formation)
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18. KEEP IT SIMPLE & STUPID
There are ways allowing you to make a better and quicker decision.
 ZOOM IN / ZOOM OUT
 Change to higher timeframe
 Focus on 1 thing
 Forget about the candles
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19. What you really need?
 1 - 2 moving averages
 Your clear state of mind
 FOCUS
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20. 20
FORGET about the candles and ZOOOOOOM
OUT.
You do not need to know if it is a pin, bullish engulfing ,
graveyard, dragon fly.
If you are trading candles, you are looking for reversal sign
and continuation sign.
BUT you are trading moving average. You are following
trend which doesn’t die that fast.
This is what your chart should look like

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FOCUS on the black line now…
What is the trend?
See the turning at the arrow?
Focus on price now…
Most of time it is below the black line (except once after
the initial U turn of the black line)
This is what your chart should look like
What is the black line?
It is mid term/long term
trend line

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FOCUS on the black line now…
What is the trend?
See the turning at the arrow?
Focus on price now…
Most of time it is above the black line (Except initial
turning)
Image credit: Metatrader

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FOCUS on the black line now…
What is the trend?
See the turning at the arrow?
Focus on price now…
Most of time it is below the black line (Except initial
turning)
WHAT WOULD YOU DO AT THE YELLOW CIRCLE AREA?
Image credit: Metatrader

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Buy when price above black
line, sell when price below black
line. Stop loss when price break
the line again with + x
pips(variable by currency pairs).
*You can’t win all the time.
When to long / Short?
Image credit: Metatrader

25. To increase your odd of winning
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26. Pros and Cons
Advantage
- Identify Trend and reversal
- Setting up Entry, Exit and SL
Disadvantage
- Not suitable for range
- Slower than Price action
- Can easily trigger SL
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Solution
- Bollinger Bands
- Fibonacci
- Support/Resistance
- Sufficient stop loss
- Higher Time Frame
Others
- Price action
- Pattern
- Other indicators
Still remember these?

27. LETS ZOOM OUT MORE NOW
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28. 28
This is the
overall chart
that we
have been
looking at
portions.
So was the
price all
along
RANGING or
TRENDING?
Image credit: Metatrader

29. LOOK AT THE HIGHER TIME FRAME
 We have to realise this - There are mini trends exist within big range,
so does mini range exist within a big trend.
 That is why we have to look at higher time frame/Bigger picture for
better gauge of trending or ranging and plot the resistance/support
in accordance to avoid getting trap in our “Trend” trading.
 The support / resistance allow us to act early to take partial profit/
Stop loss / Enter partial positions.
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RESISTANCE
SUPPORT

30. Conclusion
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31.  We will never be right all the time, but be sure you are right most of
time by cutting loss short, let profit run(go with the trend)
 We will wait for respective setup to come.
 KEEP IT SIMPLE : FOCUS and ZOOM
 Be discipline and every new day is a new game.
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32. Trading is like playing game in the arcade, every
time you put a coin in , you are in a new game with
different settings and players. In trading , this new
game is a new trading day.
- Jason Wang
Image credit: SNK

33. Thank You
More content coming your way …
If you have any brilliant topic regards on trading , do drop me an email
at jason.wang@reachenterprise.com
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34. About Author
Jason Wang
Commercial Forex Dealer @ ideal-FX
Specialised in Physical Foreign Exchange Dealing
with spot, forward deal and other international payment
Young and ambitious with a mind full of crazy idea.
#Feel free to get connected
Jason.wang@reachenterprise.com
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