Moving Average Strategy

Moving Average Strategy

The moving average is by far the most common of all technical indicators that you will see used on charts by professional and retail traders alike.

A Moving average strategy is easy to use and add to a chart, but they can also give you some of the simplest trading signals to act upon.

However, although the moving average may give out some easy and stress free buy and sell signals; with a little bit of further basic chart reading, your moving average system or strategy if you prefer can become a finely tuned trading master piece.

In this tutorial we are going to be looking at how you can trade the DAX using a triple moving average and some simple chart reading.

The results and obviously profits over time can be greatly enhanced by putting in a little bit of extra effort.

If you are serious about learning to trade the markets then my advice to you is to learn to trade one particular strategy that suits your strengths and learn it well.

Moving Average Strategy

The moving average strategy that we are going to cover here today can be adapted to suit your own style, goals and markets.

We are going to be trading on the DAX with a triple Exponential [EMA] moving average 20,50,100. We will not use any other indicators.

So we will be looking to trade the triple moving average crossovers but also the 20/50 crossovers if they are above or below the 100 and are in sync with the main trend direction.

To give us a greater edge of a successful trade, we are also going to be looking at using some simple price action within the strategy and also the use of support and resistance lines too.

The overall idea is that combining some of the most useful but simple chart indicators along with basic price action chart reading, the complete trading rookie will be able to trade profitably with a little practice.

Why use Moving Averages

Moving averages smooth out the prices that you see on a chart. This smoothing of the price data can help give you a clearer picture of what and where the price on a chart is heading.

Combined with the ability of producing crossover signals when using multiple moving averages, you can understand the reason why the moving average is so commonly used.

You have to remember though, that the moving average is a lagging indicator. This means that the data that the moving average offers you is delayed.

However, when you use a moving average along with some price action and S&R levels, you get a pretty reliable trading strategy.

If you are interested in learning how the moving average is calculated then you can read about it here 

Using Price Action

We are also going to be using so simple price action techniques that will help us identify better entry points to open our trades.

Price action is one of the most effective ways to trade the markets.

The beauty of using price action along with moving averages is that the moving averages are alerting you or have already alerted you to a possible trade. You will now find it easier to identify the price action at key areas by identifying common and reliable candle patterns.

Price action trading when used to confirm moving average signals makes for an awesome trading strategy that can be used on most charts.

Learn One Trading Strategy Well

Many traders fail to make a system or trading strategy pay because they are too preoccupied with trying to learn too many trading strategies at once.

They move from one system to the next and even try trading multiple systems at once… without ever mastering any of them!

Using our trading system detailed here, can be a great place to start learning a solid trading strategy that can then be tailored further to your own personal trading style, strengths and weaknesses.

Maybe you’ll prefer 4 hour charts? Maybe you’ll add a couple of different indicators? Whatever materialises on your journey as a trader is great, but learn the foundations first… and learn them well.

The Trading Video

Here is the video that will show you how to start trading the DAX with 30 Minute candles, price action and an easy moving average strategy.

Take some notes as you go along as this will help when you start to paper trade rather than keep watching the video.

Please give us a thumbs up on Youtube if you like it.

Chris is doing the video as always but you can email me if you need any help.

Moving Average Strategy Basics

As already said earlier on, there is nothing complicated about this strategy at all.

We will be using…

20,50,100 Exponential Moving Average

Price action candle patterns

IG Charts

Alerts set using the IG platform

And that’s all.

16 Personalities – What type are you?

16 personalities

Here’s a really great personality test that you can take. It’s fun, amazingly accurate and can even help you with your trading.

16 personalities is like taking a quiz about yourself. You simply answer the questions that they ask and you are presented with your personality results.

This isn’t some dodgy new website that has no track record. 16 personalities has been around a long time and their feedback is amazing.

The one thing you have to do though, to make this test work for you, is this… BE HONEST.

There is no point in taking the test if you can’t answer the questions truthfully.  Just because a question you are asked rubs you up the wrong way, you can’t tell fibs to your computer just because it will make you feel better. Be honest, or you’ll just cheat yourself from the final results.

How can 16 Personalities Help You Trading?

Well, like this. You think you know yourself right? Some of you might, but most of us are only listening to our egos when it comes to being honest about the person that you really are.

No one likes to be told that they’re wrong, especially when it comes to our image. Our image is largely based on our own personal ego and ideals about ourselves.

Your ego tells you you’re great, amazing clever… weak, unconfident, stupid. But it will never really tell you who you are or what you are capable of. That is the nature of much of our self-talk, our ego voice is often heard and is often wrong.

Your Ego Mind

Imagine that you were learning to trade a certain strategy or system; it had awesome reviews and can most certainly make you money. However, you just couldn’t get on with it and make it work.

Your ego then pipes in… you’re stupid! Nothing you try ever works. You’ll never do it. And so on.

Luckily that is rarely the case. Unfortunately though, many of us believe the self-talk the ego gives us.

But, if you had an accurate understanding of the type of person that you really are then this could help you in and on all levels.

OK, the system or strategy you tried may not suit your style; it might be too fast, to slow or whatever. But knowing who you are deep down without listening to your ego berate or inflate you can really help in situations like this.

If you have a clear unbiased script of your own strengths and weaknesses, you could easily use it to help find a more suitable trading strategy… plus it can also be very useful in many other areas of your life.

You can try the test here, it’s free and totally awesome.

I’m Back from Holiday and Back to Blogging

blogging v trading

Ola… I am officially back at the blogging helm as of today.

I had an amazing rest over the holidays and I do feel rather revitalised.

Blogging v Trading

Running a blog is actually far harder than it is to trade.

Trading for me means doing very little in all honesty. I open a position and that is more or less it. I either buy the stock and hold it, or spread bet a position that I will check once every evening [if that].

Blogging on the other hand takes many hours of work. This is especially true if the content is going to be in depth and over 1000 words.

I enjoy blogging though and I’m looking forward to writing some great reviews and trading strategies for you in the coming weeks.

I have had a lot of requests about joining my spread betting course. For those that didn’t get on, you can be assured that I will open the doors again at some stage. Although this is not going to be anytime soon, I imagine it to be January and if not then it will be the following January 2020.

Information Service

This is something that I wanted to offer this year. However, the FCA seem to be cracking down on all areas of the trading zone.

Someone I know who is very well known in the trading field, recently received advise that they needed to go and train and get a qualification so that they could continue to blog and give trading tips as such.

Ironically, I can personally and safely tell you to go and lump on 500K on Shakhtar Donetsk to win the Champions League. That’s NOT a tip at all so please don’t do it! I’m just stating the facts of what you can and can’t advise someone to do with their own money.

Anyway, I will not be offering a separate members information service at the moment. I will however keep posting interesting trades to my spread betting students.

The Year Ahead

I’m looking forward to racking up some nice profits trading along with Vince Stanzione for the rest of the year and Spread Betting currencies also.

If you are looking to start learning to trade, try out paper trading with one of the trading systems I have written and also make sure you are signed up on the waiting list if you want to get on my course when I release it again.

As said, I’m back at the helm after my holidays so drop me a line if there is anything I can help out with.

 

The Longest Summer Holiday Ever

Summer holiday

I hope you have all been enjoying the weather. For once, the UK has had a summer to remember.

I have totally and utterly been making the most of it.

It has been during this summer holiday that I have decided to take a little bit of me time out and just relax.

As we all know, it is not every year that the UK basks in such glorious sunshine.

I have just been enjoying everything that you can do when the weather stays fine and that has also meant doing as little as I can work wise.

Blogging

As most of you know, I have been blogging non stop for 7 years now and to be honest it has been nice to take a step back from the keyboard.

I love blogging about trading, but this is a chance for me to refuel my batteries and not think about to much for a few weeks.

You can still read all my posts and trading systems whilst I’m chilling out though.

If you’re looking for a system to trade then take a look at the DAX trading system that I wrote. It is still one of my favourite strategies.

I’ll be Back

I’ll of course be back at full steam once the holiday period has finished at the start of September.

From now until then I’ll give you some brief updates as to what I’m doing… (maybe) but on the trading front it is going to be very little.

I am away quite a bit this month too, so the break from serious trading blogging will be useful.

ESMA Rules

Remember, the new ESMA margin rules come into play on the first of August. This means you will need more money to fund each position you open. You can read more here. Personally I’m sick of hearing about it now. Let’s just move on.

 

Spread Betting New Regulations

What does it mean to spread bettors with the new regulations that come into force on August 1st 2018 from ESMA?

 

Well amongst all the noise, not that much if I’m honest.

 

New Regulations

 

The main impact of the new rules is going to see the margins on your trades higher.

 

This will mean that depending on your bank size, your ability to trade lots of different markets at once will probably decrease.

 

That isn’t such a bad thing though and personally I have never gone into the red with my margin anyhow. I have never or at least can’t remember having the dreaded margin call before.

 

You Will Now Need to be Selective

 

Overall you will now probably be set to trade fewer markets with a lower margin.

 

This again can work in your favour.

 

Trading like a lunatic on a full moon should be reduced to a minimum under the new regulations.

 

You will now need to choose your trades with a greater degree of consideration to preserve your margin.

 

You will also probably find that you will naturally be forced to become an expert in the fields that you trade.

 

Maybe you’ll start to consider trading just the major 6 currency pairs…. Maybe you’ll just trade the DAX or the DOW… How about ETF’s or only Shares?

 

This is in itself a trading strategy.

 

I have mentioned many times that becoming an expert in a tight set of markets or even a singular market can reap rewards.

 

These new regulations will give you the ideal opportunity to implement this idea.

 

Staying Positive

 

I seriously don’t think that there is any reason to feel like you have missed the trading boat.

 

Far from it if you think about it.

 

There are more and more new opportunities to profit from every day.

 

There are new ETF’s to trade that are added to the likes of IG and CMC all the time.

 

The markets will still ebb and flow as always.

 

If you personally feel that you have missed your chance, then I’m afraid that you probably have. It is down to you to make things happen in your life.

 

Another Option… Remember the Old Days?

 

As you probably know, I have been trading with Vince Stanzione for considerable time now.

 

Most of my positions that I hold with his advice are held in one of my Schwab accounts.

 

This means I actually own the stock.

 

Just like how the hero’s of stock market trading started out.

 

You don’t just have to spread bet to make money from the financial markets.

 

Although this option does require a larger bankroll it is still a very realistic and valuable option.

 

New Margins

 

Here is a quick glance at the impact that the new regulations will have on your trading margin.

 

It is far from the final curtain.

 

New Regulations

 

Opening a Trade or Taking a Position

You may think that there is no difference in the above. But although the statement might seem at best, subtle. There is actually a big difference in them both.

Opening a Trade

Opening a trade is exactly that. Let us say that you have a MACD signal and that you now need to open a spread bet on IG.

So you login to the IG platform and go long the USD/CAD

You do not consider any other factors in opening this trade.

You are not concerned with support and resistance levels.

Nor are you influenced by news or any other outside factor.

You are only interested in opening a trade.

Winning and Losing

The trade you have opened may win or lose… who really knows.

The point is this. Just opening a trade if you are new to trading can be a risky mind game.

You could be opening the trade just when it is about to correct, retract or consolidate.

As a new trader, seeing your losses spiral can cause you all sorts of frustrations. Even if the trend and trade you have opened is correct long term. The short term losses can affect your judgement.

You could close your trade to soon or even get stopped out if using the wrong stop loss strategy.

A Better Approach

To create the best chance of winning at trading and more importantly winning the mind game that trading is. It is probably better for new traders to take a position rather than just open a trade.

Let me explain.

Taking a position

When you take a position, you are aware of support and resistance areas. You understand the importance of candle patterns.

You are looking for the best possible entry point even after you have had a signal from an indicator/s you may use.

Look at this chart beneath.

opening a trade

You can see that the USDCHF has given us a MACD  crossover signal in February [red arrow].

Now if a new trader had taken this, they may well have been panicked out of the trade by the ensuing retracement or have been stopped out, depending or their stop strategy.

A smarter way to trade this signal is to wait for price correction and a valid candle pattern to signal an entry point.

If you had seen the MACD crossover and used this as the first identification to go long, you could have then waited a few weeks for the price action [blue arrow] to break resistance levels and then enter.

In fact, it is after this price action that the price really starts to move.

[A more seasoned trader can and will enter the trade accepting the huge ups and downs before her trade goes into profit.]

So instead of just entering the trade after a technical indicator signal, look for some price action too.

This little technique can save lots of trading heartache, losing trades and stop outs.

So just remember… After a trading indicator signal, wait for valid price action. This can stack the blocks firmly in your favour to more winning trades overall.

 

I’m Trying… I Really Am.

Trading Videos… Not!

As I have told you before… me and public speaking just don’t seem to go together.

However, over the weekend we tried to do some video footage for an introduction here on the blog.

It was nothing in depth and really just about a minute or so worth of a greeting.

OH MY… I froze, stuttered, laughed, shouted, swore and everything else that I didn’t need to do.

I printed a script that was put in front of me and I couldn’t read it or use it to remind me… I have no idea why.

After about an hour, my partner had had enough and said that I need some sort of help that he just wasn’t qualified to give me.

Anyhow… we didn’t manage to do much… apart from laugh even more about licking the clinks!

I can only get better I suppose?

Here’s a quick glimpse so that you get the idea of what trying to do videos with me has been like.

 

Holidays

We will be away again in a few days. This is the 3rd flight this year in our quest in looking for a beautiful place to buy a home abroad.

So far, Inland Andalucía is looking good, but Lagos in Portugal is certainly in the running.

One of the main selling points to us is being away from inebriated Brits but not being isolated without a soul in sight.

Also, flights that we can get from our local airports eliminates the need of traveling to London… this is equally important. Of course, the weather is too.

We are in no rush at all though… It’s a long term commitment and we’ll take our time in trying to get it right.

Another option that I have mentioned before is buying a property outright [in the UK or abroad] and using the rental income to pay for the long term rent of a place abroad.

This strategy has pros and cons too but it may be an option.

I’ll keep you posted on all of this and what we find.

 

Amazon Income Streams

I get a lot of emails asking about what else I do for income and if trading is all that I do?

Well, while running the blogs and trading is enough, I do however still sell various products online.

Years ago I posted about how I turned $100 to over 30,000 in just over a year selling on eBay. Unfortunately this venture came to a halt after eBay changed their search algorithm and I could no longer rank my products. This apparently affected a handful of accounts.

Roll on to today… and for another income stream, my partner and I have been building a little Amazon business too.

This started a couple of years ago and was a bit back and forth. In the beginning we just didn’t seem to be able to conquer how to make it all come together as a business.

 

Making Progress

We then went full steam on the idea in January 2018 and started to make headway slowly but surely.

Recently, things seem to be taking off again. This is due to learning how to rank products and creating an action plan to do so.

However, it is not easy to do this on Amazon, it can take much trial and error.

Then you also have advertising and promotional costs to add into this… but Amazon can be lucrative if you work out how and what works for your products.

Amazon FBA

We use what is called Amazon FBA. This means we ship all our products into the Amazon warehouses and then Amazon store, take payment and dispatch our stuff.

This takes masses of work out for us and means that we can essentially leave most of the selling process in Amazon’s hands giving us another, somewhat silent income stream.

Of course you pay for this privilege, and you pay with your hard earned profits.

Even so, to us it is well worth paying for.

The thing you will find with Amazon is that it can take a while to get rolling and then things start to happen. After the snowball effect starts you can then start to scale up.

Hopefully we will not experience another eBay situation where we all off a sudden can’t rank our products.

Overall though, Amazon seems like a sounder investment. The whole idea seems more sustainable. Let’s hope so anyway.

So if you fancy earning some extra dosh each month on the side, it may be worth taking a look at.

It’s not a get rich quick strategy, but it works.

Here’s a screenshot of our Amazon dashboard, you can see our progress over the year [yellow, red, blue figures] and how we have really moved forward over the last couple of months.

Amazon results

 

Places Available Spread Betting Course

I actually only have a couple of spots vacant for my new spread betting course.

Only 2 dropouts overall… but to give everyone a chance to get in, I will make 10 spaces available over this coming week.

If you miss out on your chance to join me next week then you will have to pay full price of £297 after Friday 25th May 2018.

The trades I have published over the last 8 weeks in the private members area have netted over 1800 points profit.

We have also developed a trading BOT that I am currently testing with real funds. This will also be available and offered to you free of charge as soon as the tests have finished. You can use the BOT to trade the DAX for you.

I will send an email out to everyone once I activate the buy now buttons again over at the New Members Website

So keep an eye on your inbox over the weekend.

Remember… you have my cast iron guarantee should you decide my awesome course is not for you… so you have absolutely ZERO risk to check it out.

Swing Trading Spread Betting

Swing trading is one of the best trading strategies that you can ever master.

Learning to swing trade can give a trader the upper hand in the markets and the edge that you need to tip the balance in your favour… literally.

In fact, I could honestly say that it is one of my favourite trading strategies overall.

It is also some of the most successful of traders’ favourite choice of trading arsenal.

So what is swing trading? How do you do it? And what can you swing trade?

 

What is Swing Trading?

Swing trading is the process of trading the price movement of any given security that is repeated in a given price range.

Look at the chart beneath…

You can see that I have drawn support and resistance lines where the price has reached high and low points over the space of the given time that you can see at the bottom of the chart.

swing trading

Drawing these lines creates a channel where the price moves back and forth [swings].

It is this price movement back and forth, that creates opportunity for us to trade by giving us an indication of where the price is likely to go next over a space of time.

Once we have drawn in support and resistance levels, we can speculate that the price is likely to ping around within these zones.

Obviously the price can also break out from these levels, but these breakouts can also present trading opportunities… although we will not be covering that here today.

 

How do You Swing Trade?

Quite simply, you create a price zone and look to open positions when the price reaches the support or resistance levels and looks like it [the price] is about to retract.

Although that may sound incredibly simple [and it is once you know how] it is not so simple that everyone uses the strategy to regular effect.

The difficulty lies in the fact the ‘you’ the trader has to decide if and when to hit the button and open the trade.

Unlike relying on one of the myriad of indicators that you can add to a chart that supposedly tell you when to buy and sell [yeah right] You actually have to decide yourself.

It is this decision making that puts many traders off from swing trading.

However, as said, if you take the time to learn swing trading you can and will have a reliable trading strategy for life.

How do you know if the price is going to retract from a support or resistance line?

Well, you don’t!  But there is a way to put the odds of successfully speculating a winning trade.

This is done by looking for candle patterns to form at these support and resistance levels or looking for moving average crossover signals. I actually cover this in depth in my spread betting course.

There are many candle patterns that you can look for but some do perform better than others and also occur more frequently.

If you decide to use moving averages to identify the swing trade then keep them short.

You will want to use a fast moving average that is less than 10 and something medium term that is less than 50. Anything longer will likely get you into the trade way to late.

 

What can You Swing Trade?

Swing trading is not limited to any particular security type. It does however lend itself to currency trading very well indeed.

Currencies often trade in ranges for periods of time.

They then strengthen or weaken out of these ranges [breakouts]. Unlike stocks that tend to move in one direction or the other up or down [although some stocks do obviously trade in range at times too]

The good thing about swing trading currencies is that you can rinse and repeat.

According to statistics, currencies only return on average 7% a year.

But if you are swing trading then you can actually increase those percentages on occasions if you choose the right pairs. This percentage can be increased further by using 4 hour charts.

So for example, lets say that USD/CAD moves 7% higher over a year; it is all the swing trading back and forth within the year that can increase profits instead of just holding the one long position over a year.

There is clearly going to be more work in swing trading, but the rewards and profitability can be increased.

If currency trading isn’t your thing, then there is no reason why you can’t start to look for shares that are trading in a range. You could even try commodities.

If you open a demo account at one of the financial bookmakers like IG or CMC markets, you can test the strategy out in real time and not even risk a penny.

Chart Times

I have found that the best charts to use with this strategy are the daily candle charts. These are the most accurate and stress free charts to trade.

You can also use the 4 hour charts very effectively although you will find them slightly more volatile.

In Summary.

In summary… swing trading is well worth taking the time to learn. Learning how to do it may not all fall into place overnight and doesn’t rely on mechanical trading indicators.

Overtime though, it can give you a reliable trading strategy that helps maximise returns in what are considered slower moving markets like currencies.

Swing Trading Video

Here is a video my partner has done for you that outlines swing trading using the daily chart of the USD/CAD.

 

Can you make money with a trading BOT?

Trading Bot 

I have recently been developing a trading BOT for the members of my spread betting course.

 

The idea behind this was to enable those that were at work or busy during the day to have a solution to trading.

 

If you had asked me a few months ago if a BOT could make money, I’d have frowned and probably said I doubt it very much.

 

But, to my partners and my surprise, the back test results have been amazing.

 

How we Made Our Trading BOT

 

Well, we didn’t have to write any code. All we did was add our moving averages into the programme. Set a stop loss and also an exit strategy a boom… the BOT was born.

 

The most surprising thing that the trading bot showed us, was that over the very short term, it was more accurate than we were.

 

How and why can this happen?

 

Well that is actually quite easy to explain. Because it activates the trades immediately as they happen, it opens at the very best and earliest point.

 

When trading very short time frame charts, unless you are at your PC all day, then getting the trades on in time and then getting the message to subscribers that I had made a trade was a pain. In fact, I had to wait for other signals to come into play before I could enter a trade if I was late and then this often resulted in missing a lot of the cream. Add into that the time it takes to then send the email out… You can see why we did it.

 

When you are trading one day candles or even 4 hour candles, these difficulties don’t present themselves. One day candles are far easier and way more forgiving.

 

What were the Trading BOT results like?

 

I [ok my partner mainly] created one bot with a guaranteed stop loss and another with a trailing stop.

 

The results of the trading bots from the 20/11/17 to date returned 93.14% and 108.33% respectfully.

 

Now you have to take note that these dates are not all trading days… so the actual percentages may be even better… even so, they are still very respectable.

 

So basically you could double your bank every 5 months on average.

 

However, the results over the last month have been amazing and have returned just over 46%

Trading Bot results

 

But it’s easy to say theories work isn’t it? So not to talk BS we started to test it out this week with real account funds.

 

I’ll keep you posted with the results, so watch this space… but from now until then you may want to try and build a bot yourself. It is actually very easy using the chart packages Prorealtime and Tradingview. You just need a good strategy to run on it.

 

As said, this Trading BOT is only for subscribers of my spread betting course. But… if any spaces come up I’ll notify you so make sure you are on the waiting list so that you don’t miss the chance to join me.

You can add your name here there is a form at the bottom of the page.