The Moving Average indicator guide PDF provides advanced techniques for using Moving Averages (MA) in trading.
- Trade with the Trend (Pages 4-6): Use the 200 EMA to identify a long-term uptrend (price above, EMA pointing higher) and the 20 EMA for short-term trends. Gauge trend strength by the MA’s steepness—steeper means stronger, flatter means weaker.
- Identify Value on Charts (Page 9): Define “low” and “high” using MAs. For long-term trends, use the 200 EMA; for short-term, use the 10 EMA. The author uses the space between 20 & 50 EMA as an “area of value.” Pro tip: MAs work best in trending markets, not range markets.
- Set Stop Loss (Pages 10-11): Use dynamic Support & Resistance (SR) from MAs to set stop losses beyond these “barriers,” reducing the chance of premature triggers. This can also apply to horizontal SR.
- Better Time Entries (Pages 13-14): In trending markets, MAs act as dynamic SR. Avoid entering when the market is “overextended” from the MA (like a stretched rubber band); wait for a pullback to the MA to enter, improving entry timing and reducing stop-outs.
- Ride Massive Trends (Page 15): To ride trends, avoid profit targets and trail your stop loss using MAs (e.g., 50 EMA). This allows you to capture extended trends, as MAs can act as dynamic SR for prolonged periods.
- Identify Best Markets to Trade (Pages 17-18): Use relative strength to pick markets. Compare markets in the same sector (e.g., USD/CAD vs. USD/JPY) by plotting 20 & 50 EMA and assessing steepness. Short the weakest (steeper downward) and long the strongest (steeper upward).
- MA Trading Strategy for Big Trends (Pages 19-21): Not a crossover strategy. Steps: Confirm an uptrend (200 EMA pointing higher, price above). Wait for the price to test dynamic support (20 & 50 MA) twice, then enter on the third test. Set stop loss at 2 ATR below entry, take profits when the price closes beyond 50 EMA. Apply vice versa for downtrends. Tweak based on timeframe, risk (1% of equity), and markets (60 markets across 5 sectors like currencies, equities).
Conclusion (Page 22): MAs help identify trends, value areas, stop losses, entry timing, trend riding, and market selection. The author emphasizes adapting the strategy to your personality and schedule.
This guide focuses on practical, advanced MA applications, avoiding basic concepts like the differences between SMA, EMA, and weighted MA.
Introduction
A subscriber recently asked me…
“Rayner, what’s the one indicator you can’t do without?”
Without a doubt, I replied, “Moving Average” (MA).
To be honest, I wasn’t a moving average fan in my early years of trading. I had
thoughts like…
“Indicators are useless because it’s lagging.”
“Indicators are for newbies.”
8 years later… I can tell you, I’m wrong.
MA is one of the most versatile trading indicators I’ve come across, and it can be used
in different ways you never thought possible.
Warning:
This isn’t a basic guide where you’ll learn the difference between simple, exponential,
or weighted MA (you can google them yourself).
These are advanced trading techniques that I’m using to trade the markets (and
some of them you’ve probably not seen before).
Are you ready?
Let’s go.
Contents
INTRODUCTION ……………………………………………………………………………………………………………………………………..3
HOW TO USE MOVING AVERAGE TO TRADE WITH THE TREND………………………………………………………. 4
HOW TO USE MOVING AVERAGE TO IDENTIFY VALUE ON YOUR CHART………………………………………. 9
HOW TO USE MOVING AVERAGE TO SET YOUR STOP LOSS …………………………………………………………..10
HOW TO USE MOVING AVERAGE INDICATOR TO BETTER TIME YOUR ENTRIES …………………………..13
HOW TO USE MOVING AVERAGE INDICATOR TO RIDE MASSIVE TRENDS …………………………………….15
HOW TO USE MOVING AVERAGE TO IDENTIFY THE BEST MARKETS TO TRADE…………………………..17
A MOVING AVERAGE TRADING STRATEGY THAT LETS YOU CAPTURES BIG TRENDS …………………19
CONCLUSION………………………………………………………………………………………………………………………………………. 22