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About Simple Moving Average or SMA
SMA or Simple Moving Average Strategy is one of the primary trading indicators that can help you to identify the bullish or bearish trend. In my last article, I have already explained you how to use and identify the upcoming trends and reversals using the SMA.
If you are in the field of trading for a while, you must have understood the importance of the moving averages as in almost all the indicators you will find the presence of the moving averages.
In my last article, I also told you that using a solo Simple moving average is never a good strategy, therefore. In this article, I will combine two Simple Moving Average with periods 15 and 31 that can give you great results.
- Simple Moving Averages calculate the average price of the security usually the average closing price.
- The indicator ribbons around the price and their intersection generates buy and sale opportunities.
- The SMA is a lagging indicator, meaning it is based on historical prices and may not predict future price movements.
- Traders often use SMAs to identify the trend of security. A rising SMA indicates an uptrend, while a declining SMA indicates a downtrend.
How to configure 15 and 31-period SMA on Expert Option
To configure the 15 and 31-period SMA on the Expert Option follow the step below
- Firstly login to your account. In case you don’t have one click here.
- Once, you have logged in to your Expert Option account. Click on the indicator button and select the moving average from the menu.
- In the Moving Averages menu, select “Simple Moving Average”.
- In the SMA settings, change the period to 15 and select the color you want to use for the indicator.
- Repeat the process, but this time change the period to 31.
- Click “Apply” to add the indicators to your chart.
Please buy trade with green Domination
When line 15 cuts line 31 from the bottom and later stays above the same is an indication of a current bullish trend and here you should place a buy trade.
Place sell trade with red Domination
Similarly, when line 15 cuts line 31 from above and later stay below the same is an indication of a current bearish trend and here you should place a sell trade.
Trading with the SMA strategy is very easy as you have to just focus on the intersection of two moving averages. Well, the best thing you can do is to practice the above Simple Moving Average Strategy on the Expert Option demo account and keep the tracking record of the number of trades you have actually made correctly and then check how this indicator behaves for you.
I hope you have understood the concept clearly. I wish you the very best of luck!!