POWER OF MOVING AVERAGES

POWER OF MOVING AVERAGES

Sharing this simple yet powerful strategy to trade consistently any market. The strategy can be applied to any timeframe in any market.

Description-   A moving averages often act as a serious support and resistance. The 20 and 50 Moving average often act as a floor for the scrip or market. The price bounces from it generally. The risk reward is great if we can buy or sell at nearest to moving averages.

Strategy- In this strategy i am using 4 hour chart. You can use any time frame. Larger the time frame better the results are as you will eliminate unnecessary noice. Below is the example of Nifty 4 Hour charts. Plotted 20,50 and 89 Ema, Slow stoch and ADX. This strategy in for postion and swing traders.

Here you can buy as price touched 50-89 Ema and bounce back when stochastic is oversold. Risk reward ratio is good. Exit if trend reverses and price fall below 89 ema. Risk reward you can take 1:2-2.5. On observing this chart you wil find out that how moving average act as a serious support or resistance. Same with any scrips.

Simple things are powerful and effective one. moving averages are like sustitutes to trendlines.

Thank you.