Maximize your trading profit by using the SMA 

Everyone wants to make millions of dollars. People are trying their best to achieve financial freedom in life. Despite all the hard work, very few people can actually lead their dream life. Thanks to the recent advancement in technology people like us can easily trade the Forex market and secure financial stability. Having easy access to the online Singaporean trading community doesn’t necessarily mean you will have the Holy Grail. Unless you push yourself to the edge, trading the currency pairs will never bring any good result. You have to know a precise way to maximize your profit potential in a high leverage trading.

There are many essential parameters which you can follow to increase your win rate. But today we are going to highlight some simple technique based on SMA. If you can follow the guidelines, you will see a dramatic change to your trading performance.

What is SMA?

identify the long term trend in the market. If the price of a certain asset trades below the 100 and 200 SMA, look for a potential sell signal. Similarly if the price trades above the 100 and 200 SMA you need to look for buy signals. For this reason, smart traders often use the 100 and 200 SMA as a dynamic trading zone. If you spot any bullish signals at the dynamic support level, execute long trades in your online trading account. Similarly, if you spot any bearish signals in the SMA, you need to execute short orders. Though you can use the 100 and 200 periods SMA in the different time frame, it’s better to use it in the daily and weekly time frame.

Riding the market trend

Once you have executed a long or short trade, you can use the 100 and 200 SMA to maximize your profit. To understand this process, you need to understand bearish and bullish cross over. If the 100 SMA cross above the 200 SMA, the overall market trend is bullish. On the other hand, if it crosses below the 200 SMA, you can consider the market is in a bearish trend. Once you execute a trade in favor of the market trend, you should not close the trade unless you spot a crossover in the 100 and 200 SMA. This is one of the most effective position trading strategies. Once you master this, you can easily make a huge profit from a single trade.

Save yourself from the trend reversal

No one can say that a trend will never change. At times the long term existing trend often gets changed without showing significant sign of reversal. You can easily save yourself from the trend reversal by using the 100 and 200 period SMA in the 4-hour time frame. Let’s say, the overall market trend is bullish. If you spot any bearish crossover in the 4-hour time frame, you can accept a new bearish trend in the market. Similarly, you can also protect yourself from the bullish reversal.

Indicators are not but helping tools. If you can learn its use properly, you can dramatically boost your profit factors. Instead of using too many indicators learn the proper use of 100 and 200 SMA. Use the Saxo demo account so that you can understand how the readings react to different conditions of the market. Devote yourself to learning the proper use of this indicator and you will see a positive change in your trading career.