And one way to do this is to use the moving average indicator to set your trailing stop loss. If you want to trail your stop loss using the 50MA , then you only exit your trade if the market closes beyond it. If you want to ride a short-term trend, you can trail with a short-term moving average like the 20MA. Or, if you want to ride a long-term trend, you can trail with the MA.

The Stochastic is a momentum indicator created by George Lane. If you visualize a rocket going up in the air — before it can turn down, it must slow down. Momentum always changes direction before price.

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In other words, the Stochastic indicator tracks the momentum of price. It identifies when the price is gaining or losing momentum.

Most traders are using Stochastic indicator the wrong way. They go long when the price is oversold, and go short when the price is overbought.

One of the worst ways to place your stop loss is just below the lows of Support, or above the highs of Resistance. It gets stop hunted easily because the market tends to trade beyond these levels by a few pips before reversing its direction. And if you want to trade the breakout, you can enter your trade when the price closes beyond the range.

If you trade forex, then you know there are 3 main sessions to it — Asian, European, and New York. To make things worse, you have daylight savings which shift back the European and New York Session by an hour during a certain period of the year. And with the Forex Session indicator, it makes things easier for you because it highlights the respective trading session on the charts. The Forex Session indicator makes it easy for traders to manually backtest intraday trading strategies. And if you want to take things a step further, you can combine different Forex indicators and get better trading results.

The MA is useful to understand the longer-term trend. Does price action work on lower timeframes too? Or should I only trade in higher timeframes like 4-hour or the daily? Ray, Your comments are incredibly insightful. If i focus on shorter term Swing Trades, and my RSI and Stochastics have been adjusted for shorter periods, would you use a shorter term MA as your trend guide??

My avg holding period is 1 -5 days. I know you value the d as the key direction so i think the question is —would you NOT take the into account when focused on much shorter time horizons? The concept is what matters. If you want to trade short-term trend for a given timeframe, use a shorter term MA. Rayner, this post was extremely informative. Thank you.

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I also use MA to determine short to long term trends and for Stop Losses too. Keep up the great work you are doing. Much appreciated. Recently, not more than 1 month ago, I found another use of indicators by Joe Dinapoli. He used displaced moving average, and fibonacci. I am still in the process of learning and digestion. Perhaps you have heard of his name and if possible, explain some of the use of his indicators. Thanks again Rayner. Hi Rayner, Atm I trade stocks not forex and I use ema, macd histogram, rsi, adx and stochastic.

I use atr for stops. Hi Rayner, You are really godsend. Your articles are really an eye opener which makes us more confident in our trades. Looks like you are all out to make all of us a successful traders. Hats off to you. God Bless. I want to ask why do you trade long when the market is above the SMA ,? When you mention moving average in the beginning of your article are you using simple or exponential. You can merely avail for more and more information about the Forex indicators below. Using Forex indicators can benefit the traders and the investors in plenty of ways and various methods too.

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