So we are now want to talk about the moving average strategy and the exponential moving average strategy. So this video will be a bit longer. But however, these strategies are really interesting and that's why we want to see what happens with the moving averages here. So basically what isn't moving average moving average is just a normal average but it's moving which means you can set up the date range and so how many range and days and fixed points for the average you will have and this is good for your strategy because if you say okay, you would be looking for long investment. You should also look for long average meaning in tracking analytics be using that 100 or 200 moving average range and if you are normally looking for shorter investments, should look for 10 days or 30 days moving averages. So, but let us go into the chart and see what we can do here.

You can go on indicators and firstly put the MPA so is the moving average and we needed three times to just click three times on this button and then we can make this first green and the first one is here the length for 10 days here so you just put 10 and the sources where you were the computer getting a source so which means if you're going for the clothing course it's always take the course from the closing of candle or date as can get the highest or the lowest points wherever and just click done and we will make this also with 30 days range and just look for us. style we make this one in yellow, you can do every color you want. And last is the red one. It's the longest one and it's the 200 days moving average. And what she now basically let me just delete this over here, what you basically see is that the moving average is or are symbolizing here, trending lines within the course.

So what we can see is that the moving averages are always going with the course. Okay, so those are the basic ones. However, we will go on a one hour chart to get a more closer look in what we have or what happens here. So it's quite interesting basically in there Moving Average and the exponential moving average have a couple of rules. And the first rule is if the course is upper or below trending line, it's an positive negative signal. Meaning if the course is like here, above the red line is the first positive buying signal sold for raising courses.

And the second one is also if the courses over the 30 days line. However, the 10 times isn't that necessary because it's just too short average to giving and giving exact calculation forms for us. And the next rule is the you getting a new signal buy or sell if a candle. So any candle here could it be crossing a line up or downwards which means is crossed up is an buying signal and if it costs downwards and selling signal so basically, this happens here so the candle go through a moving average is here, okay, it's a buying signal. And on the other hand we have the third rule and this is easily if we have a cross over from two moving averages. So if if it's like this one, it's been selling signals so 10 days moving average will cross the or crossing the yellow 30 days moving average downwards.

So short one crossing the longer one, which is generating and selling signal. This is basically what happens here. However, the moving average strategy and exponential moving average strategy are one of the best trading strategies in my opinion. Because you can easily make and make in securing, securing trading and you can you can put your put your stop losses higher and higher. So this is basically really good and let's see how this is works and we have here as you see in a bit site, citing trends sight words trend, and if we now zoom in a little bit what you see is that we get a rating three positive signals over here. Okay, we have to first one that's here and here this bars and candles crossing the moving average is upwards.

Okay, so they crossing up and going over over the trending line and they are always here over the red trendline. So which is the longest one the 200 trend line. And this is a good really good strong buying signal. And what happens there is that we have all signals together. So we are over the 200 average, we have crossing signals and we have also the crossing signal that the green, the shortest moving average, crossing the yellow one upwards. Okay, crossing up.

So we have all those positive signals over here. And then you see what the chart is doing raises up and raises up. And so how you can trade with this and with Douglas is quite easy. So this red line here is just a trend line which I set up there. And this whole line would be the range where we would set up a long position. Okay, so let's go for price range.

Look how much is it? It would be eight or 5% around. Okay, so quite, quite nice the trade and if you look here, it's In the amount of two days, so really good and these arrows symbolizing possible stop loss points. So, if we would go into the market here you could easily put your first stop loss on the 200 moving average line because this is always or this moving average line is always a good point for your stop loss because of the long time okay 200 days more than a half year it could be due or it could could be happen so many stuff in a half year okay. So, if this is the average, you can put your stop loss there for the first time and see what happens and you look to course and see Okay, the first kind of goes immediately very high.

So I would say okay, this could be here around two or 3%. I would set up my stop loss theory again. And then I would still look what happens and we are never in this range we are never generating a sell signal, okay? Because we are always over all trending lines all over the average lines okay? And the bars don't hit them we don't have crossing signals or anything. Okay, so this is the perfect example for this and you can set up your stop loss even higher and higher and higher and just go over the hours with the course.

Okay, you see what the course is doing, but you're securing your positions easily. And you can get higher and higher and higher. So you have to complete trade. And then what happens then is that we have the first red candle which is hitting again the 10 days moving average, okay, so this is basically your short signal but however, not a complete one because only the end of the candle sitting during the trend line. Not a complete candle, not average here. So what I would do is set up here on this red line would be my latest stop loss.

And what happens then is okay, the costs go up again, but also down, under under the moving average, it's just as the moment way only to look what the what the course will do what the prices will do. Because it could be go up again or down again. So you don't you can can't say this in this moment, because you have no more signals here. You have changing signals, but not very strong ones just light ones. Okay? This is just the 10 days average is not a strong signal, just the light signal.

And that you can see over here, and it would be still my point from my stop loss after we have this point. And this point is interesting because it should be a Sunday because we have long gap over here, okay. And the next crossing signals here, so one day later or what is the day, an hour an hour, okay, One hour later as this long red candle happen so the price pulled back to 152 from our stop losses 156. So we would sell automatically our stop loss over here from 156 before the course will fall down there, okay, we have a higher profit range, which is good for us because the signal comes firstly here and that's the interesting thing on this example, for leaving the position because we have here a gap should be a weakened gap. And normally you would say you would see that we have here a longer candle from a daily chart, which is crossing those average lines so we can do This life.

However, that's why we should use the stop loss to fixing our profits. Yeah, that's just necessary for us to fix, you know, profits here. And then we could look what happens that and what you see is also the negative and then the cyclists trend. However it's after comes the next positive trend with the same rules you see over here you can on the red line, you would set your stop loss and see what happens you can go along with the whole course itself and just go with your stop loss until you have the next strong selling signal. Yeah, that's quite for the example for the moving averages. So just again, for rules, you get the lighter rules if the cause is upper a strong moving average, like 200 or 30 days moving average and the second If the bar or the candle crossing directly through a moving average line you get next signal positive or negative.

And the third one is if moving averages crossing their selves, okay? also positive and negative. So here's the next example what you can see is here the 10 days crossing through the 30 days moving average and we have early under first selling signal here, so here and here, and I would open normally if I see this port. Now, we are here on the course. Then I would open the first short position and what you see is we are exactly on all points under the 10 days average and we are also crossing down 200 moving average was really strong selling signals so you can easily go with your stop losses here and That would be also here, the latest stoploss, which is then yeah, automatically sell at this point where the cause turn around. And here we get changing signals.

So not really. And here again, you see, there are many points where the moving average strategy works quite useful. And great. And I also tried this in my map of the world and making over. I didn't know what 300 or 400 trades with the moving average and exponential moving average strategy. And in the next video, I'm just practicing model, I will show you the statistical data of it.

Because it's quite successful. I have a profitable range of 9%. So really nice. And what we will now also see is the exponential, because this is a bit more interesting. So the moving average Oh, let me just leave One ma again and then exponential two times. So and let's know the MA 30 days again, let's make this red.

And then just for show you this, we make a new yellow line of 30 days and just close the other one. So what you can see the red one is the MA and the yellow one is the E Ma. And the exponential one is always quite nearer to the to the charts itself. That's because the exponential one having more data points normally there they'll going forward, the high the low and the mid course and then make an average of this and put it to a bigger average on the time you set in. But this is why the exponential one is nearer to the course. And this is quite interesting for traders to Use these strategies, because if you see this happens earlier, you can, you can work with it earlier.

Yeah. You know earlier the other ones and you're better trait. So if you look now on our green and our green arrows which I set the stop losses and influence points, you see that you don't have these points with the exponential moving average. And just with the moving average, and with the AMA the yellow one, you would see that we have here the crossing signal quite earlier and was over here with normal moving average, and hits the exponential one, which is Yeah, just quite nearer. So you got these inflammations earlier as the rest and you can trade effectively. Okay, more effective, because this is just quite a small points.

But if you know these points, you can make better stop loss management and be more profitable. And the end is just really little difference between the moving average and the exponential moving average strategy that we have the different data points. Okay. Quite just for that. So, yeah, this is the moving average strategy. And I always would prefer the exponential moving average strategy just for your overview.

It's really interesting strategy and we will see this a couple of times in the practicing module. So let's see us for now in the next video for the analytics basics.