Using the 100 and 200 EMA

Video is going to be looking at using the 100 and 200 moving average and your trading now these two moving averages are two of the most widely followed and most popular moving averages that are used in the financial markets. And I’m just going to give you a quick rundown of some examples of how good they are technically. Now obviously when using any technical analysis you always want to combine that with some fundamental reasons for the trial. You don’t want to just be blindly following the tech because when you do, you’re going to find yourself very frustrated and you’re not going to be getting the best out of your trading. With that being said, whether the 100 and 200 moving average do offer excellent places to enter the market. And I just wanted to give this one example. This is the Australian dollar, Japanese yen Pan Am I have in front of me the four hour chart. Now if you were following the Australian dollar, Japanese yen you would know that this pair has been in a bearish about that downtrend for some time. There’s been a very important fundamental drivers for that and the fundamental driver has been there’s been rhetoric after the U.S. U.S. China trade war and the tariffs that the US is going to put on China has meant the Australian dollar has been sold quite heavily.

And the reason the Australian dollar has been sold quite heavily because of the U.S. China trade war tariffs are quite simply because Australian dollar is a proxy for how well China has got it going. So for example, if China were doing badly the Australian dollar will do badly its about 30 per cent of Australia’s GDP, which is consisted of exports that it sends to China. So if China isn’t producing then Australia is not going to be able to exporting so high and hence the Australian dollar is way down. The Japanese yen by contrast, has been bid on the risk of sentiment that’s been in the markets the genuine concern about global trade tensions and global growth slowing down has meant the Japanese yen was bit. So you had a technical and funded. You had a fundamental reason to sell the Australian dollar, Japanese yen pair. Nowhere on the four hour chart, we see some excellent places we could use the one hundred and two hundred moving average to enter those short positions and you can see how the Australian dollar yen respected the hundred moving average, there at a brokerage here and then the 200 moving average is expected here over a number of days.

This provides the key resistance level before prices finally sold down. We at the moment we have another test of the 200 moving average and prices just testing the 100 moving average threatening more downside potentially down to this 79 handle. So the hunter moving average offers excellent places for you to enter technical trades and you can look at a 100 moving average expected 200 moving average expected, respected again here and here respectively again here and you can see can use some Candlestick analysis you have a you know a kind of hidden bias and taking action from this bar, here you have a decent bearish pinball over 200 moving average here you have a bearish outside ball you have another bearish outside bar you have another bearish outside bar of a hundred moving average. So you know using the technical analysis Candlestick Paton’s as well as the moving averages you can see why don’t use the 100 and 200 moving average and you’re trading when you’ve got a good technical fundamental bias for a trial. When you pull up the 100 and 200 moving average and it might give you some decent areas to define and limit your risk by using them. Thanks guys. Bye for now.

The post Using the 100 and 200 EMA appeared first on The Diary of a Trader.