I don't deny it, and the reason I purposely cherry pick this chart is because it's much easier for me to illustrate my point! This is the China A50 market. Noticed that it didn't touch the period moving average but, I consider this a second test as well:. So the market could actually trade just before this 50 period moving average or could trade slightly beyond it as well. So, you may want to take a profit off the resistance level. For trend following trade, you could just use a simple trailing stop with the period moving average.

You may or may not get stopped out depending on how strict you follow your trailing stop whether is going to be Whether it is the moment that the candle closes below the 50MA or whether it is the second candle that closes below the 50MA. With that said I want to do a recap so kind of you know encapsulate what you have learned so far. I think there is an enough of that on the internet, right? This means you are trying to buy low and sell high! And I apply this to the Forex and futures market it works well for me. And this strategy seeks to take advantage of the pullback of the existing uptrend.

This means that you're trying to get to long on the pullback; And I would show you shortly on how I go about achieving this. With that said right let me lay out the criteria that I look for when I trade this moving average trading strategy: Define the long-term trend. If the price is above the period moving average, I will look to long only.

I will define the area of value in the existing trend. What I like to use is the period moving average. It's an area you are not dealing, not a specific line. The reason I use 50 because many traders look at this moving average.

And it tends to become a self-fulfilling prophecy, so I use the period moving average. The second reason is that when you use a period moving average. You are able to identify swings in the trend easily. Let me explain what is a swing So, it's very difficult to trade the pullback when the trend is strong. This is why I use the period moving average! The next thing I will talk about are: Entries.

How I look to enter this particular trading setup. The general idea is that you want to let market reverse in your favor before you enter the trade. Stop loss. So you don't get stopped out of your trade too early. Traders tend to get stopped out of their trade and then see the market continue back in their favor. It really depends on whether you are trying to capture a swinging in the trade or whether you want to ride the long-term trend. Let me walk you through what you have learned: First and foremost, how do you I define the long-term trend?

The black line is the period moving average. The price is above it so I look to go long only. Second, where is the area of value? I use the period moving average, which is the blue line. You can see that the price respecting it. Bounced once, twice and it came back for the third time. This is the area of value! So, what do I look for in the entry? Actually, it is very simple You can look for simply a higher close in your intended direction. That's the most straightforward and simple approach.

But if you ask me, the best kind of trading setup is where you get a strong price rejection. If you get this type of strong price rejection, you have better odds of the trade working out.

Understanding the triple moving average system

But what about for stop loss? I would say be careful of just putting your stop loss just belong the lows. Because it can get triggered very easily.

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What I like to do is to give it some buffer. It gives your trade more room to breathe, and you don't get stopped out prematurely. If you want to learn more go and watch one of my videos here: "How to set a stop loss so that you don't get stopped out unnecessarily" It's on YouTube right, and I go into more details over there. With that said, that is for your entry and your stop loss. But what about your target? For targets, you want to take just a swing in the market.

If you want to take a swing, go long on the pullback. And then capturing the move up until the previous high. For example, let's say you are trying to capture a swing in this market. It makes sense to set your target profit just before the resistance area. Why don't you want to set it above the resistance area?

Because you do not want to fight through the obstacle to get through the level! For Short positions — to the High of the last candle before the cross. Take-profit should depend on the stop-loss and should be not less that stop-loss. I recommend setting TP to 1.

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• Method 1 - Triple moving average trading strategy.

Use this strategy at your own risk. It's not recommended to use this strategy on the real account without testing it on demo first. Do you have any suggestions or questions regarding this strategy? What Is Forex? Up to USD. Please disable AdBlock or whitelist EarnForex. Thank you! Features Very easy strategy to follow.