The moving average is a very popular technical indicator for foreign exchange investors. Because of its simplicity and practicality, it is superior to other moving averages. It better reflects the average transaction price or holding cost of the market in a certain period of time, so it has received a lot of investment. Loved and valued by the readers.
What is the foreign exchange moving average?
Forex moving average is also called moving average, or MA for short. It originally meant moving average. Since we made it into a linear shape, it is generally called moving average, or moving average for short. It is the sum of closing prices for a certain period of time divided by the period. For example, the daily MA5 refers to the closing price within 5 days divided by 5.
The way to distinguish the foreign exchange moving average is in two periods: one is the K-line period we observe, that is, one hour, 4 hours, one day, one week, one month, etc. The other is the average period we observe, which is 5 Daily, 10th, 30th, 60th, 120th, 200th, etc. The size of the K-line period and the average period we observe determines the strength of the pattern through the average analysis.
Can the foreign exchange double moving average trading system be profitable?
In foreign exchange transactions, different trading systems are used for different market trends. As with all other trading systems, the prerequisite for the profitability of the foreign exchange dual moving average trading system is that investors must have a general grasp of the direction of the foreign exchange market, and then find entry and exit points through the double moving average.
What is the foreign exchange double moving average trading system?
Any trading system is a balanced system of winning rates and odds. Even if your winning rate is only 10%, you can still answer with a profit. For example, if you lose 2 yuan at a time and win 6 million at a time like a lottery, assuming the probability of one in a thousand, you still make a steady profit. Moving average trading system, such as no filtering, 15-minute chart, just crossover, enter 20 points and then come out, 10 points stop loss. Assuming a 10% winning rate and N million dollars, you only need to take the double shot method. For example, starting from 0.05, if you lose 0.1, then lose 0.15, lose 0.3, lose 0.6, lose 1.2, lose 2.4, lose 4.8, lose 9.6, lose 19.2. Earn once, and this one will earn everything back. All trading systems are basically the same in fund management.
How to use the foreign exchange double moving average trading system?
The buying and selling points of the double moving average system are relatively concise. If investors are more inclined to do short-term foreign exchange transactions, they can choose the 5-minute moving average as the fast line and the 30-minute moving average as the slow line. The fast line indicates the short-term average price and continues to run above the slow line, indicating that the trend continues to grow. Passing the slow line on the fast line is the so-called “golden cross”; passing the slow line under the fast line is the so-called “dead cross”. Generally speaking, if there is a golden cross, it is a confirmation of buying points, which is a good time for investors to enter the market.
The moving average can effectively track the obvious trend, but it cannot do anything about the oscillating market, which is determined by the nature of the moving average. The foreign exchange double moving average trading system also has its shortcomings, that is, the error rate of the transaction is relatively high, but the loss is far smaller than the profit.
Under the premise of a sound fund management strategy, the foreign exchange double moving average trading system is also a viable trading tool. Of course, investors should choose a suitable time frame when using the foreign exchange double moving average trading system to reduce the error rate. .