[00:01] strategy you can use with the moving average indicator. This strategy I'm about to show you will help you avoid false signals, catch big moves, and profitable results. So, let's get into it. First, let's quickly break down what
[00:15] is a moving average. At its core, a moving average is a simple indicator that calculates the average closing price of an asset. What it does is smooth out price movement, making it easier for us to read the overall trend.
[00:27] Now depending on its settings, moving averages can help you identify different types of trends. For example, a higher setting like the 200 period moving average is used to identify the long-term trend of the asset. This helps
[00:40] you get a sense of where price might go next over the long term. A lower setting like the 20 period moving average helps you identify the short-term trend, which gives an idea of where price might move next in the short term. Now, something
[00:52] in the middle like the 50 period could be used to identify medium-term trend. To adjust these, simply head over to the indicator setting and select the period based on which trend you're looking to analyze. So, how do we actually use the
[01:05] moving average to identify trends? To do that, you simply look at where the price is located compared to the indicator. For example, if I'm using the 200 period moving average and the current price is located above it, that tells us that the
[01:19] long-term trend is up. And if the price is below the 200 period moving average, it tells us that the long-term trend is down. You can also apply a shorter moving average on the same chart like the 20 period to check the short-term
[01:32] trend. So in this example, even though the price is below the 200 period, it's currently above the 20 period. That tells us the long-term trend is down, but the short-term trend is up. Let's look at another example. Here we have
[01:46] both the 200 period and the 20 period moving averages applied on the chart. As you can see here, price is above both of them. This tells us that both the long-term and short-term trends are up. So, you can apply different moving
[01:59] average lengths depending on which trend you want to identify. A lot of traders also use moving averages to spot trend reversals, usually by watching for breakouts. For example, here the price is below the moving average, which tells
[02:12] us that the trend is on a downtrend, but then it breaks above it and starts moving up. Some traders take this breakout as a sign of a trend reversal. Although this is a common idea, we should actually avoid relying on
[02:24] breakouts if we want to spot trend reversals because false breakouts happen all the time. Like in this example, price broke out above the moving average, making traders think a trend reversal is coming only for it to reject
[02:37] and come back downwards. So, while a breakout could show early signs of a trend reversal, it's not a good idea to use it as an entry trigger. There are better ways to trade it. And so, let's get into the best strategy for trading
[02:50] the moving average indicator. But real quick, I want to let you guys know that membership where I share all my trades in real time to our members. Last month, we had an extremely strong performance, closing 56 winning trades with only six
[03:03] losses, averaging a total gain of 98%. And we were able to achieve this even So, if you're interested in following our trades, click the link below to join the membership. So, the strategy is called the crossover strategy, but it's
[03:18] not the typical one you've probably seen everywhere. Here's how most traders do it. First, they'll apply two moving averages with different periods, like the 20 period and the 50 period. When the faster moving average crosses above
[03:31] the slower one, traders usually take it as a signal to buy. If it crosses below, they take it as a signal to sell. While that sounds simple, trading it this way will almost guarantee you lose money fast because in real market conditions,
[03:45] the signals won't be accurate. Let's look at a real example. In this chart, the 20 period moving average crosses above the 50 period. But look at where the crossover happened. Price had already gone up a lot. And if you bought
[03:58] the crossover signal, it's not a good riskto-reward trade. And right after that, price drops. So trading the moving average this way will result in many bad trades. There's a better method instead, one that'll give you way more consistent
[04:13] and profitable entries. By the way, you won't find this strategy in any article or YouTube video out there, so pay attention. First, I'm going to walk you through exactly how to set everything up step by step. The first thing you do is
[04:26] picking something in the middle. Not too short, but not too long either. So, anywhere between the 15minut to the 4hour time frame works well. In this example, we'll be using the 15-minute. Next, you can also choose any asset or
[04:39] chart you like because this strategy works on pretty much any market. In this case, I'm using the Salana crypto chart. Then go to the indicator section and type moving average. Now, you'll notice that there are actually different types
[04:52] found works best for this strategy is the simple moving average. Now, click it twice to apply two of them to your chart. Once the two moving averages are applied, you'll see them show up in the corner of your chart. Now, go to the
[05:05] settings of the first one and change the length to 50. Then, go to the settings of the other one and change the length to 20. So now we have a 20 period and a 50 period simple moving average applied to our chart. So the first thing you
[05:19] crossovers that formed on the chart. In this case it's this one and this one. crossovers would have performed if you had traded the signal. Would you have made a profit or had taken a loss? Let's start with the first crossover here
[05:34] which was an upwards crossover meaning we would have taken a buy or a long trade. But look at what happened after price. instead reversed and dropped there, you would have suffered a massive loss. So, this crossover will be labeled
[05:49] as a failed crossover. Now, let's look at the second crossover. This time, it's a downwards crossover. And so, the signal was to enter a short trade. This simply means that we're betting that price would go down. However, price did
[06:02] the opposite. It reversed and shot up instead. So, this crossover is also labeled as a failed crossover. Currently, the last two crossovers have been a failure, which tells us that in this specific chart and time frame,
[06:14] crossover signals haven't been reliable. So, we should avoid trading it here. Now, if we had traded the next crossover anyways, it would have ended up as another failed trade. This is because when one or both of the last two
[06:27] crossovers are failures, there's a high chance that the next one will also fail. So, that brings us to the key part of the strategy. Before taking the trade, always check how the last two crossovers performed. For us to take a trade, both
[06:39] crossovers need to have been a success. If even one of them failed, you avoid look at an example where the last two crossovers were a success and see how that changes everything. This time we're on a forex chart, specifically the Euro
[06:54] step is to look at the last two crossovers that formed, which is this one and this one. Now if we check the first one, it was an upwards crossover. So we would have entered a long trade.
[07:06] If we had done that, the trade would have actually been a success since the price continued higher. So this is labeled as a successful crossover. Now let's check the second one which is a downwards crossover. If we had entered a
[07:18] short trade here, it also would have been a successful trade since the price went down significantly. Currently the last two crossovers have been a success which tells us that in this specific chart and time frame crossover signals
[07:30] are reliable. So we can look to trade the next signal. And here we get an upwards crossover. So we enter a long trade. Besides the entry point, the placement of the stop loss is also equally
[07:43] important. We don't want to place it too close where it gets easily triggered but not too far where we risk taking a big loss. The best way to place a stop loss in my case is to find a support or resistance level that's close to our
[07:55] entry price. In this example, there's a clear resistance level here, which makes it a reasonable spot to place our stop-loss. For our take-profit target, we could set it at two times the size of our stop-loss. And as you can see, price
[08:07] hits our profit target. So, the key to this strategy is to look for a chart successful because that gives us confirmation to trade the next signal. However, just because the previous crossovers were successful doesn't mean
[08:21] the next one is guaranteed. If that were the case, then crossovers would work markets behave. That's why we always place stop- losses during our entry in case the trade goes against us. Now, let's look at another example. Here we
[08:34] have the XRP crypto chart on the 15-minute time frame. First, we check the last two crossovers that formed. This one and this one. This first one is have entered a short trade and eventually price dropped significantly.
[08:49] you'll notice that the price did went up briefly before the actual drop happened. However, it never actually broke past this resistance. So even though price it wasn't enough to invalidate the setup. That means we can still count
[09:04] this as a successful crossover. Now looking at the second signal, it was an upwards crossover. So we would have entered long and eventually price rallied higher. So this counts as a successful crossover. Now since both of
[09:16] the last two crossovers were a success, we can confidently trade the next signal. And right here we get a downwards crossover. So we enter a short trade. For our stop loss, place it at an ideal level. In this case, there's a
[09:28] nearby resistance level that we can use as our stop-loss placement. For the take-profit target, set it at two times the size of our stop loss. And as you can see, price hits the takerit, making this a successful trade. Now, if you're
[09:41] still watching until this point, you're probably one of the few people who are But let's be real, it's not easy doing it on your own, which is exactly why I created the Data Trader Premium membership. Inside, me and a team of
[09:54] professional traders share all of our crypto trades in real time with our members. Last month, we had an extremely strong performance, closing 56 winning trades and only six losing trades, totaling an average gain of 98% in just
[10:07] one month. So, despite a very tough month for the crypto market, our members were still able to take advantage of a large number of successful trades. If trades, click the link below to join the membership. I'll see you there.