Learn how to use 100 and 200 Moving Average Strategy

How to use the 100 and 200 Moving Average strategy in your trading

Do you want to know how to trade moving average crossovers? Watch our latest video on Moving Average Strategy to find out what happens when 100 day moving average crosses the 200 day moving average.

100 & 200 Day Moving Average Strategy – a simple, but effective guide

This video is going to be looking at using the 100 and 200 Moving Average in 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 it with some fundamental reasons for the trade. 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, however, the 100 and 200 Moving Average do offer excellent places to enter the market.

And I just wanted to give this one example to you. This is the Australian dollar/Japanese yen pair. And I have, in front of me, the four-hour chart. Now, if you were following the Australian dollar/Japanese yen pair, you would know that this pair has been in a bearish downtrend for some time. There have been some very important fundamental drivers to that. And the fundamental driver has been, there’s been rhetoric, after the US-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 US-China trade war tariffs is quite simply because the Australian dollar is a proxy for how well China is going. So, for example, if China were doing badly the Australian dollar will do badly. It’s about 30% of Australia’s GDP, which is consisted from exports that it sends to China. So, if China isn’t producing, then Australia is not going to be able to export in so high and hence, the Australian dollar is way down. The Japanese yen, by contrast, has been bid on the risk-off sentiment that’s been in the market. The genuine concern about global trade tensions and global growth slowing down has meant the Japanese yen was bid. So, you had a fundamental reason to sell the Australian dollar/Japanese yen pair.

Now, here on the four-hour chart, we see some excellent places where you could use the 100 and 200 Moving Average, to enter those sure positions. And you can see how the Australian dollar/yen respected the 100 Moving Average there, it broke it here, and then, the 200 Moving Average is respected here, over a number of days. This provided a key resistance level before price finally sold down. At the moment, we have another test of the 200 Moving Average and price is just testing the 100 Moving Average threatening more downside, potentially down to this 79 handle. So the 100 Moving Average offers excellent places for you to enter technical trades and you can look here, 100 Moving Average respected, 200 Moving Average respected, respected again here and here, respected again here. And you can see, you can use some Candlestick analysis. You have a kind of hidden bias and tailing action from this bar here, you have a decent bearish pinball on the 200 Moving Average here, you have a bearish outside bar, you have another bearish outside bar, you have another bearish outside bar of the 100 Moving Average. So, you know, using the technical analysis Candlestick patterns, as well as the Moving averages, you can see. And why don’t use the 100 and 200 Moving Average in you’re trading, when you’ve got a good technical fundamental bias for a trade? Why not 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!

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