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 This trend trading strategy uses a moving average to determine the trend and two other moving averages to determine the entry signals.

A forex chart displaying when to enter trades based on moving average crossovers, with stoploss and exit
The MA cross strategy is suitable for beginners because it’s simple and provides objective signals. Also, it uses the most popular technical indicator, which is the Moving Average (MA). We’ll use only three Moving Averages and this can be either exponential, simple, smoothed or linear. Keep in mind that MAs are lagging indicators, meaning that they reflect the historical price movements rather than predicting the future.

For this strategy we will use a moving average to determine the trend and two other moving averages to determine the entry signals and, if the trader wants, to exit. You can use any configuration, depending on the price action on the chart you're trading on. This strategy usually works well on any timeframe and any market. Thus it can be used by swing traders and day traders alike.

The moving average crossover strategy explained

  1. If the price is above the Trend Moving Average, the expert advisor will only be allowed to open long trades and it will ignore the short signals. However, if the price is below it, the EA will ignore the buy signals and place only sells. The other two moving averages, Medium and Fast, are used to determine the trade signals.
  2. If the fast MA falls below the medium MA, a sell trade will be opened. On the other hand, if the fast moving average raises above the medium moving average, a buy order is placed. Some traders are using the trend moving average as a trailing stop, other prefer to close the opened trades as soon as the 2 faster MA meet again.
moving average ea settings
Consider the timeframe and the trend when choosing the settings

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