So, you’ve heard the term Moving Average flying around in the forex jungle, and now you’re wondering, “What the heck is this thing and how can it help me buy low and sell high like a true trading wizard?”
Chill, grab your coffee, and let’s break it down — no jargon, no rocket science, just pure trader talk.
What Is a Moving Average ?
Moving Average (a.k.a MA, a.k.a the chillest indicator ever) is basically the average price of a currency pair over a certain number of periods — smoothed out so you don’t freak out over every candle jumping like it’s on Red Bull.
Imagine it like this: MA is your calm, wise friend who says,
“Forget the drama. Let’s look at the bigger picture.”
There are a couple of popular types:
Simple Moving Average (SMA) – just a plain ol’ average.
Exponential Moving Average (EMA) – this one puts more weight on recent prices. It’s like the SMA with more attention issues — it cares more about what just happened.
How to Read Moving Averages (a.k.a “The Chill Way”)
Okay, here’s the fun part. The moving average line helps you spot the trend. That’s it. Seriously.
If the price is above the MA line → Uptrend! Think BUY
If the price is below the MA line → Downtrend! Think SELL
If the price is kissing the MA and going sideways… congratulations, you’ve found a boring range market. Go make coffee.
The Best Settings for Moving Average ?
Now, here comes the spicy part. People love to argue about MA settings like it’s the World Cup. But here’s a basic guide to get you started:
Fast MAs (short-term):
SMA 5, 9 or EMA 10
Great for scalping or day trading — catch those quick moves like a ninja.
Medium-term MAs:
SMA or EMA 20, 50
Ideal for swing traders who like to chill a bit and let the market come to them.
Slow MAs (long-term):
SMA or EMA 100, 200
These are your big-picture buddies. They don’t lie — if the 200 EMA says trend is down, don’t fight it!
Popular combo:
Try the classic Golden Cross & Death Cross:
50 EMA crossing above 200 EMA = Buy signal
50 EMA crossing below 200 EMA = Sell signal
How to Use MA to Decide Buy or Sell in Forex ?
Let’s get to the money part.
Buy Setup:
Price is above your chosen MA (e.g. EMA 50).
Wait for a pullback to the MA (price comes down a bit).
When price bounces back up → Hit that BUY button like you mean it!
Sell Setup:
Price is below your MA.
Wait for a retest/pullback.
If it rejects the MA and drops again → SELL, baby!
Pro Tip: Combine MAs with other indicators like RSI or MACD to avoid fakeouts. MAs are chill, but they’re not fortune tellers.
Final Thoughts
Moving Averages won’t make you rich overnight (unless you have a genie), but they’re super reliable for understanding market direction and timing your trades. Use them wisely, tweak your settings, and test them out on demo accounts before going full cowboy in the live market.
And hey — if all else fails, just remember:
“When in doubt, zoom out… and check your moving average.”
P.S. Don’t forget to check out more forex tips and daily signals at forexprofit.top — where serious trading meets a little fun!