How To Use Heiken Ashi and Simple Moving Average Crossover Trading Strategy

Forex Heiken Ashi Simple Moving Average Crossover Trading Strategy – The simple moving average is probably one of the most basic forms of technical analysis.  Even hard core fundamental guys will have a thing or two to say about the indicator.  A trader has to be careful, since there are unlimited number of averages you can use and then you throw the multiple time frames in the mix and you really have a messy chart.

 
Below is a play-by-play for using a moving average on an intraday chart.  In the below example we will cover staying on the right side of the trend after putting on a long position.

 

 

5 SMA – For the hyper trader.  This short of an SMA will constantly give you signals.  The best use of a 5-SMA is as a trade trigger in conjunction with a longer SMA period (20 SMA).

 

• Heiken Ashi candle white
• Price above 5SMA low
• Price above Midle Bolinger Bands
• MACD Line upward (blue line above red line)
• RSI Line above Midle bolinger bands line
• Momentum upward and above 100  line

 

• Heiken Ashi candle red
• Price below 5SMA high
• Price below Midle Bolinger Bands
• MACD Line downward (blue line below red line)
• RSI Line below Midle bolinger bands line
• Momentum downward and below 100 line

 

Be patient – When it comes to trading, patience truly is a virtue. Learn to sit on your hands until the market gets to the point where you have drawn your line in the sand. If it does not get to your entry point, what have you lost? There is always going to be an opportunity to make gains another day.