Live Trading Example – Moving Average and Volume Indicator

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Moving Average and Volume Indicator - Live Forex Trading Example

This time I combined a 10-period and a 20-period Simple Moving Average indicators with the Volume indicator. I managed to recognize signals from these tools and to do a successful long trade in the USD/JPY chart.

Moving Average and Volume Indicator Signals

  1. The 5-minute chart of the USD/JPY shows a price increase and a big distance between the two SMAs.
  2. This means that the price might be exiting a consolidation in bullish direction.
  3. That consolidation resembles a Double Bottom chart pattern.
  4. At the same time, the Volume indicator shows increasing trading volume, which means that the price might create a big move.
  5. On the 1-minute chart we see that the slower 20 SMA has supported few times the faster 10 SMA.
  6. On the 1-hour chart we see that the general bullish trend is strong.
  7. The 1-hour chart shows that the price is bouncing from the 20-period SMA.
  8. The 15-minute chart shows a bullish SMA crossover, which supports the general bullish idea.\

Stop Loss and Target of the SMA Trade

I bought the USD/JPY placing a Stop Loss order at the top between the two bottoms of the Double Bottom pattern.

I didn’t state a certain target on the chart because I had no clue for how long eventual price increase might have lasted. Therefore, I observed my trade very carefully, which put me in a very good position to exit the market.

Live Trading Example

The price created a shocking increase just for seconds. The good thing is that I was constantly watching my trade. I considered that it is better to exit the trade on the top of that move without waiting for a further extension. After all, volatile price moves often continue with big pullbacks. Therefore, I closed my trade and I collected my profit.

Bottom line, the trade generated 0.22% for less than 20 minutes.

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Damyan Diamandiev
Damyan Diamandiev

Damyan is a fresh MSc International Management from the International University of Monaco. During his bachelor and master programs, Damyan has been working in the area of financial markets as a Market Analyst and Forex Writer. He is the author of thousands of educational and analytical articles for traders. When being in bachelor school, he represented his university in the National Forex Trading Competition for students in Bulgaria and got the first place among 500 other traders. He was awarded a cup and a certificate at an official ceremony in his university.

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