Trading Moving Average Envelopes (3/7/07) GBPJPY +110 Pips

December 4th, 2007 expert Posted in FOREX TRADING STRATEGIES and CONCEPTS, FOREX TRADING ENTRY STRATEGIES |

ONLINE FOREX TRADING CONCEPTS:-    Sideways trading market,    Moving Average envelopes,    Channel Trading,    Straddle Trade

3julygbpjpy.gif
Results from channel trading are particularly good in sideways trading market although channel trading can be applied just as profitably in trending markets. The application of channel trading in trending markets will be discussed in another trade of the day. There are many ways of identifying trading channels eg. Using trendlines, moving average channels, etc.

Moving average envelopes are normally found under the indicator options of most trading packages. These indicators are based on envelopes around a moving average. At Expert-4x we like using fast moving averages of between 3 and 5 but traders must experiment to find the moving averages that meet their trading needs. There is no fixed setting for the width of these moving average envelopes. Traders must use their own judgement to try to capture 90% to 95% of the price movement within the envelopes. By definition only exceptional price movements will poke out of the channel occasionally making this a great retracement trading system.

Yesterday this system was used very effectively to make 110 pips on the GBPJPY. See the trading chart. The 4 hour chart and using envelops that capture 95% of the price movement was used. To make sure that we were in a sideways trading market we made sure that there was a high higher than the existing price levels and a low lower than the existing price levels. We place a sell entry order at the level of the upper envelop and a buy entry order at the level of the lower envelop thereby straddling the price. The price went up and activated the sell entry order before returning back into the envelope and heading south were the lower buy order acted as a great target.

www.Expert-4x.com is a sponsor of this free educational blog and uses many of the concepts high lighted in these postings for its daily alert services.

Leave a Reply

You must be logged in to post a comment.

Disclaimer:-The information on online Forex trading presented on this webpage should not be regarded as forex or currency trading advice. Currency trading and fx trading is highly speculative and should only be done with risk capital. Foreign Exchange prices rise and fall and past performance from currency trades is no assurance of future performance. This online forex trading webpage is a currency trading information and technical analysis webpage only. Accordingly, we make no warranties or guarantees with respect to the correctness or validity of its content. Forex traders making use of the online currency trading information presented do so at their own risk. The information provided herein does not take into account their forex investing objectives, financial situation or needs of any particular person. This site is not intended to by used as the only source of currency trading information or forex education. It is important and assumed that traders use sound trading principles when using the online forex trading information on this currency trading site. This includes trading common sense, sound money and risk management and full personal ownership of any trading decisions. Investors should obtain individual financial advice based on their own particular circumstances before making any foreign currency investment decision