MOVING AVERAGES STRATEGY:

1. Understand the Basics What is a Moving Average (MA)?
A moving average smooths price data to identify trends. Types:
Simple MA (SMA) and Exponential MA (EMA).

2. Types of Moving Averages Simple Moving Average (SMA): Average prices over a specific time. Less responsive to recent price changes.

Exponential Moving Average (EMA): Gives more weight to recent prices. More sensitive to short-term price movement.

3. Common Time Periods Short-Term: 5, 10, 20-day MAs Medium-Term: 50-day MA Long-Term: 100-day, 200-day MA

4. Key Strategies

a) Golden Cross 50-day MA crosses above 200-day MA → Bullish signal (Buy)

b) Death Cross 50-day MA crosses below 200-day MA → Bearish signal (Sell)

c) MA Crossover Strategy Buy when short-term MA crosses above long-term MA.
Sell when short-term MA crosses below long-term MA.

d) Support & Resistance MAs act as dynamic support during uptrends and resistance during downtrends.

e) Trend Confirmation Price above MA = Uptrend Price below MA = Downtrend

5. Advanced Techniques Double/Triple MA Strategies: Use combinations like 20-50-200 EMAs for refined signals.

MA Envelope/Bands: Measure volatility by plotting % bands above/below an MA.

Confluence Zones: Look for overlap between MA signals and other indicators like RSI, MACD.

6. Timeframe Considerations Use different MAs based on trading style: Scalping: 5-min or 15-min with 5/20 EMAs Day Trading: 1H to 4H with 20/50/100 MAs Swing/Position Trading: Daily/Weekly charts with 50/200 MAs

7. Risk Management Use stop-loss below moving average. Combine with volume and confirmation indicators. Never rely on MAs alone – avoid false breakouts.

8. Backtesting and Optimization Test different MA periods on historical data. Adjust for asset volatility and trading style.