Hey hey, what's up my friend, so i remember right in my early years of trading. You know. One of the first few indicators i came across was the moving average indicator. You know i learned that you know when the fast moving average crosses above the slow moving average you buy and when the fast moving average crosses below the slow moving average you sell.

So i tried this strategy and guess what right i was actually losing consistently. So at the point of time, i kind of you know blame the indicator. Oh moving average, it's a scam, it's a lagging indicator, it doesn't work and then i move on to you know the next step in my trading career so fast forward. A few years later, when i was working in the prop trading firm, i realized that my boss is actually using a moving average indicator.

So i got intrigued right and i asked myself: how do i you know effectively use this indicator when i've you know failed at it before so i went into testing and research mode and i realized a few secrets that i wasn't aware of before. So this is why, in today's training, i want to share with you. You know some of my findings. Specifically, you will learn right.

The truth about moving average indicator that nobody tells you one simple technique to help. You avoid false breakout right and i believe, right 90 of traders - don't know this at all how to predict market turning points ahead of time. So you can better time your entry with low risk and finally i'll share with you how to write massive trends without getting stopped out on a minor pullback sounds good, then smash the thumbs up button. If not, then hit subscribe, let's get started okay.

So what is the moving average indicator all about? So let me explain: this is an indicator that calculates the average price over a given period. So, for example, if you have a 20-day moving average, it simply calculates the average price over the last 20 days. If you have a 200-day moving average, it simply calculates the average price over the last 200 days. So generally, you can look at moving average as an indicator that follows the price, but with a lag right.

It follows the price, but you know it always lacks the price. So let me give you an example. So if you look at this chart over here, you can see that this is the pound against the japanese yen and let me overlay the 20 period moving average. So you can see over here the 20 period moving average is this red line over here, so you can see that as the price goes up, the 20 period moving average also goes up together with the price right following the price movement and over here as the Price goes down notice how your moving average is pointing down lower as well.

Okay, so one thing to note about moving average is that if you use different settings of moving average, you will get different responsiveness of it. So, for example, if i go with a 50 period moving average, this means that it calculates the average price over the last 50 days. You realize that this moving average is not quite as responsive as the 20 period moving average, which is this red line over here. Then this blue one is the 50 period moving average.

You can see that the blue one is not quite as responsive, because this is a longer term, moving average right relative to the 20 period moving average and if you overlay with another longer-term moving average or an even longer term, like the 200 period moving average, you Can see that it's even less responsive, so hopefully this gives you a good idea to understand what the moving average indicator is all about, because in the next section right, we are going to use this indicator right and learn how to avoid false breakout. Now let me share with you a mistake right that almost all new traders make that that cause them to get caught right in a false breakup. So let me just show you this right. So let's say the price is in a range between these highs and then this lows or otherwise you know in between support resistance.

Then the price goes up, comes down, goes up, comes down and then it breaks out and then traders will think. Oh man, rainer, look. How bullish this is it's time to buy, buy, buy and then they buy, but what's the problem with this well, the problem is that the price right it has moved too fast too soon right, it has just expanded its energy right. Moving from this uh lows of support right all the way up into this highs of resistance, and when he has expanded his energy right traders who entered near the lows of support, they will be looking to take profit at resistance.

So that means that they will exit their position, they will sell and that puts selling pressure in the market when the price is at resistance. Traders who see this right, who want to go on the sidelines and see this right, they'll think hmm price is a resistance. Let me show again more selling pressure in the market, so when it's a when there's you know enough selling pressure in the market. Usually what happens is that the market starts to falter and goes back down lower and you get caught in a false breakout.

So what's the solution? Well, the solution is it's relatively simple? Really, so let me explain what you should do instead. So, let's say again now: market is in a range between these highs, and this lows and now market again goes up, comes down, goes up, comes down, goes up this time around right. We are looking for a build up, otherwise known as a consolidation and resistance. Now, why is that right? Very simple, because again the market has expanded its energy earlier and you want it now to store potential energy for the next move up higher.

So when it goes into this tight consolidation over here right, it's storing potential energy right for the market to make the next move up higher. At the same time, it's also telling telling you right that it's uh they're buyers stepping in so, if you imagine right previously, price is at a lows of support people bought, it traders bought it and then they're looking to sell their resistance and they sell at resistance. But somehow, even though they've taken profits and they sell the resistance, the price is still not dropping. Why is that? Well, it could mean right.

There is another group of traders coming in right willing to support this price at resistance, they're willing to buy in front of resistance because they expect the price to move up higher, make sense. So at this point you might be wondering okay. So so, where does the moving average? You know come into play and it's very simple really when you notice the price forms a build up at resistance. You can overlay with, let's say a 20 period moving average okay i'll put this in green, and you want to see the 20 period moving average right starting to slope right and support right near the low of the build up the 20 period moving average coming to The low of the build up to ready to support the price, so this tells you that you know if the price does break out of resistance.

Let's say the price does break out of. Let's say the highest of this resistance over here, there's a good chance that the market could now follow through higher. So let me share with you a few examples. Okay, so now this is the chart of dollar against the chinese u.n, and you can see this market is in a range between this highs and this low over here.

So the first thing we have is number one prices in the range. Second thing we are looking for is for a build up to form right near the highs of the range near the highs of resistance, and we have this build up form over here. So we have it right, built up. Let's call it just bu build up, and the third thing we're looking for is, for the 20 period moving average to reach the low of the build up to kind of like support the price higher into resistance.

So basically, we want a 20 period moving average right to touch the low of the build up. So let's overlay with the 20ma, as you can see over here - and you can see right - that the 20 period moving average has touched right. The low of the build up and it's kind of like supporting the price up higher into resistance. So when you see this right, what you can do is you can look to go along right as the price breaks above resistance, so one option is, to let's say place a buy, stop order above the highs of this resistance.

Let's say above this heist: okay, so, let's see what happened so in this case, you can see that the price over here on this candle - it probably would have triggered your entry as the price. This candle here spike up through the size - and you know, got you into a long trade, your stop-loss, so it can just be a distance below the low of the build up somewhere around here. Okay, and in this case it's a cherry-pick chart and you can see that the market did went in our favor, then it starts to make a pullback retest a previous resistance which could become support and then pretty much you know explode up higher. So again, this is a cherry pick chart.

I just want to know be honest with you, so let's have a look at another example, so this is the chart of bitcoin daily time frame and again first thing. First number: one: we have the price in a range between this high and this low, so number one price is in the range second thing: we're looking for the price to approach near the highs of the range resistance. So we want the price to approach near the highest of the range, as you can see over here price forming a series of higher lows into resistance. Let's call it hl into resistance, so this is another variation of a build up right, as you can see over here, and the third thing we are looking for is, for the 20 period moving average to support right the low of the build up or to support This higher low into resistance, we want a 20ma to basically catch up with the price.

So if i overlay with the 20 period moving average, you can see that it did right caught up with the price right tested number of times over here here and here. So at this point, when you see the 20ma, is you know, starting to support the price up into resistance, you can then start to place a buy, stop order above resistance. So in this case, you can either reference this high or this high over here with a buy, stop order and in this case uh. What happened is that the price pretty much exploded, higher right and went nicely in your favor.

So basically, this is the key thing right that you want to look for when you're trading breakouts, basically breakouts, with a build up. So a quick recap right number one: the price is in the range: it forms a build up at resistance. The 20 period moving average catches catches up to the low of the build up and you can enter when the price breaks above resistance, so vice versa, right for trades right in the opposite direction, basically or rather uh selling right a breakdown. So the rules will just be the opposite of it.

So a quick recap to what you've just learned to avoid the false breakout number one. You look for the price to be in a range number two. You want it to form a build up at resistance right. This is basically a tight consolidation right at resistance.

That's what you're looking for number three! You want a 20 period moving average to catch up right to the low of the build up. So let's say price is in range, consolidate, you're. Looking for the 20 me right to catch up to the low of this build up over here and when that happens, you can simply know i look to enter as the price breaks above resistance. So at this point right, you have learned right how you can avoid the false breakout in the next section.

I want to share with you how you can actually predict right market turning points right ahead of time. Okay, now have a look at this chart and let me ask you: do you think you are able to predict right that the pullback for this market is about to end over here here here here here and possibly over here? Do you think you can actually predict right where this pullback would end on this chart? For most of you watching this, you would think nah nah right now, that's not possible. I have no idea, you know where the pullback will end and i get it right. That was, you know, pretty much how i felt you know in my early years of trading.

But what, if i tell you that? Yes, it can actually be predicted, of course, not with 100 accuracy, but more often than not, and the trick here is to use a moving average that the market respects. So in this case, you see, if you overlay, with the 50 period, moving average notice right. How nicely the price bounce off the 50ma over here here here here here and possibly over here now at this point, you might be wondering ah right now. This is a cherry big chart right when i overlay for 50 period moving average the price just sliced through it like butter, and you know i get stopped out.

I get it right, so this is why the key thing right is that when you use a moving average in a trending market, the moving average that you're using right must first be respected by the market. So how do you know whether the market respects it? So this is a rule to follow a guideline that i use is that the price bounces off a moving average at least twice minimum two times. So, for example, if the market is trending up, higher pulls back, goes up, higher pulls backwards, up higher, pulls back, and you overlay with the 50 period moving average or whichever moving average. You prefer.

I usually go with the 50 period moving average because i like to trade trends right, which are usually 45 degree angle, and it has to bounce off at least twice so bounce off once twice and then, when it comes back here for a third time right. I know that there is a possibility. The market could bounce off the moving average again. So this is what i look for.

I look for a minimum of two tests, a minimum right that the market has. You know bounce off at least twice and when there's at least two bounds, then you know i can look for buying opportunities on the next re-test. So let me share with you a couple of examples, so you know how this works. So if you look back again, this is the chart of a bgfe.

Previously you saw this one and over here might seem very foreign now how i know when the market is going to bounce, and in this case i overlay with the 50 period moving average. You see that we have one bounce over here second one over here, then i know subsequently right the third one here here here. These are all potential right, buying opportunities right where i can look to get on board this trade. So how about have a look at another example? Let me just get rid of this first same one over here dollar against the canadian dollar.

You can see at this point right. This market might seem random. You know how do i know when this market is going to reverse here here here. Well, you have no idea, but if you use a market right, or rather a moving average that the market respects and in this case the 50ma again, you can see that you know hmm, not too bad right.

You can see that market you know tested once over here twice and then. The third time here could be a potential area where you can look for selling opportunities and over here pretty much. The price uh broke through the moving average and you would probably have gotten stopped out. So at this point right, you know, is there a way to actually avoid you know you getting stopped out over here as a price, you know blast through.

You know moving average and answer is yes, there is a technique that you can use right, which i want to explain right now now. The next important lesson to share with you is this is that you don't want to use moving average in isolation because, as you've seen what happened right, if you just blindly buy when the prices are moving average or blindly sell when the prices at the moving average. You could, you know just get stopped up quickly because the market could, just you know, slice through it, like you know, hot knife through butter. So what you want to do what you don't want to do.

Is you know just because you see the market, you know respecting a moving average like this? Okay, let's say it's respecting this moving average test it once twice and then come back a third time. You don't want to just blindly buy over here right because the price could just collapse lower. So what you want to do instead is to look for a valid entry trigger to tell you that hey, you know the buyers are stepping in and about to push the price higher. Only then right do you look to enter a trade, so what you want to do is to look for an entry trigger to help you time your entry man, entry trigger, can comes in many form.

For example, it can come in the form of a reversal. Candlestick patterns, like the hammer, the bullish engulfing pattern or for bearish candlestick patterns could be things like shooting star or even the bearish engulfing pattern. So, in essence, what you're looking for instead is for the market first to be trending, okay and then, when you overlay with the moving average, it's respecting this moving average over here tested once twice, and then it came back here a third time good. Let's say it comes back here.

Fourth time: okay, we want to look for a entry trigger, could be a hammer like this right to tell you that the buyers are stepping in you know, after the prices start to reverse up higher from then, then you look to enter on the next candle right With the expectations that the market could possibly head up higher, so in other words, you're kind of like looking for a confirmation that hey you know, buyers are stepping in they're about to take the price higher. Let me get on board right now, so you're waiting for the turn to occur right instead of trying to predict right and the market will turn over there, we're actually waiting for the small bounds to occur. Then we enter the trade. So let me share with you a few examples right of how this looks like so this first one over here is the chart of sblk.

So recap to what you've learned right, we are using the moving average right to help us. You know identify or predict where the market could turn, so we are looking for two bounds. First right, we have one uh one possible bounds over here. Two.

This is a third bounce and then we've got a fourth bounce over here. So, at this point, okay, you can see that we had a valid entry trigger in the perform in the form of a bullish candle, close notice how the price right close near the highs of the day. This tells you that the buyers are stepping in and the market could possibly reverse higher. So you can see that the turn has occurred over here.

It has, you know, kind of like re, starting to reverse up higher. So that's where you you want to enter the trade, so in this case you can just simply look to buy on the next candle open, which is probably somewhere near the opening price on this candle here. So this one example, another example you can see over here sees at r same concept. So if you look at this over here, market has tested the 50 period moving averages once twice, so you can see that in this case right the market didn't respect the 50 period moving average to the exact thick or to the exact level we actually slice through It by a little bit, then we relate higher, we slice through it by a little bit and then we rally high.

So this is like the reality of trading. You don't really get exact levels. You have to treat this as an area on your chart, an area of value, okay, so in this case the price comes back towards the this uh this on this third attempt and again we are not looking to buy just yet. We are looking for a confirmation that the buyers are stepping in right before we look to enter our trade, and in this case we got it in the form of a bullish, engulfing pattern notice how this body of this candle has engulfed and covered the body of The previous candle closing near the highs of the day, so in essence, we are actually looking for the turn right.

This turn the market to kind of like turn higher right before we look to enter so once it has turned once it is closed. Bullishly near the highest of the day, we can enter on the next candle open, which is about here. We will enter this price over here, okay, so this is a pretty much an example of how this looks like okay. So at this point right, you have learned right not to use uh moving average and isolation, and we have you know so far - use moving average and focus a lot about entries.

So in the next section i want to talk about how you can actually use moving average right to write massive trends. Now look at this chart over here and imagine this or imagine that you actually went long. Let's say when the price breaks above this high over here you go long, okay and the question is: how do you actually get on board and ride this huge right, massive trend now for most traders right, i can assure you they will likely get stopped out right On this pullback over here right, most of them when the pullback, because ah the market is gon na, refer us time to sell exit and the next thing you know the market just boom right continue higher. So how do you actually objectively right write a trend right without giving in to your emotions? So this is where we need to have clear mechanical rules to help you in your trading decision, and the trick here is that you need to use a trailing, stop loss.

Okay, so what is a trailing stop law, so a trailing stop-loss is basically shifting your stop-loss progressively in your favor as the market moves in your direction. So a super quick example is, let's say: market is now in a range okay and then it breaks out higher right. Let's say your stop. Loss at this point is over here now.

Let's say it pulls back right. Your stop loss is not going to shift because the market hasn't moved in your favor. Yet then let's say it continues up higher. Now you shift your stop loss higher and, let's say maybe up to somewhere here, then it pulls back you're not going to shift your stop loss because the market has.

You know uh not moved back further in your intended direction and now, let's see it breaks out higher back into your intended direction. Now you shift up your stop loss even higher to somewhere here. So this is what we mean by having a trailing stop-loss. We are trailing your stop-loss up higher as the market progressively moves in your favor.

Now, there's one simple tool that you can use and it's tada none other than the moving average right. Since this entire video is dedicated to it and what you can do is you can exit your position only if the price closes below the 50 period moving average. So let me give you an example or two examples so over here you can see. This is the same chart and, let's say again: you bought the breakout over here for whatsoever reason not important, and then you overlay with this blue line, which is the 50 period moving average.

Okay, pardon my handwriting. So what you'll do is that you will hold this position until the price has closed below the 50 period moving average. So you can see that, yes, we got a pullback over here, but ask yourself: did the price close below this blue line over here? Well, it did not close below it. It touches the 50 period moving average, but it didn't close below it.

So you'll remain holding that position that you had right. So you can see that the close only occurred on this candle here, where the price break and close below the blue line, the 50 period moving average, and this is how right you can have the chance right to write massive trends like this right. From this entry point all the way up to this exit over here so another example, this one is the stock market again, so, let's say, for whatever reason you bought, maybe on the on the pullback over here. How do you, actually, you know, write this trend up higher again, you can use the 50 period moving average, which is this blue line over here, and you only exit if the price breaks and closes below the 50 period.

Moving average like this, like what i'm drawing over here until it do this right, only that do you exit your position. If not you hold on to that long position of yours, does it make sense now, if you're enjoying this video so far smash the thumbs up button, if not then hit subscribe. So let's move on and do a quick recap: shall we so number one right: you've learned how to avoid false breakout and the way to do it is by trading breakouts with a build up. So to do a quick recap.

Market is in a range like this comes back to the highs of resistance, and then it starts to form a build up. You then overlay with the 20 period moving average and see right there. The 20 moving at 20 period, moving average, is kind of like supporting the price higher into resistance when the 20 period moving average has touched, the low of the build up. This is where you can say that hey the market has stopped enough potential energy and it could possibly break up higher okay.

So then, you can look to buy right as the price breaks out of resistance, so the second secret i shared with you is to how to actually predict market turning points in the trending market, and the way to do it is that you want to identify the Moving average that's being respected by the market and to do it we're actually looking for at least two tests right, two bounds of the moving average right to identify. You know the area of value, so in this case i use the 50 period moving average. In this example, so now i want to clarify is that there is nothing magical about the 50 period moving average. The reason why i go with it is because, personally i like to trade, this type of trends, this type of trends right, which respects the 50 period moving average, are usually about 45 degree in angle.

So if this is 90 degree, this type of trends are usually something like this about 45 degree in angle. So i like to trade this this type of trend, because it's clear it's obvious, and it gives me enough time right to time my pullback entry. Of course, if you want something stronger like a stronger train, you can go with like a 20 period moving average. You want something slower, you can go with 100 period moving average, but the key idea here is to let you know that there is nothing magical about a 50 period moving average.

I just use it because it suits me best and then the third secret i shared with you is not to use moving average in isolation because or rather any other indicator. You want to use it in isolation, but rather you want to combine it with other tools and techniques right to help. You know time your entry, so in this case i shared with you right how we can combine right, candlestick patterns with moving average. So in this case, we had the lightning a couple of bounds, one two and then the third time we are looking for a bullish reversal, candlestick pattern.

It could be in the form of a hammer right to tell us that the buyers are stepping in and and then right once the the markets that has, you know, start to turn up higher. Then we look to enter on the next candle open right. So this is what i mean by you know: don't use moving average in isolation, don't buy just because the price is at the 50 period moving average, but rather use other tools. Other confluence factors right to tell you right.

You know to help you time your entry and then finally, i shared with you a technique on how you can actually you know, trail your stop-loss and write massive trends. Again i went with the 50 period moving average and again there's nothing magical about this. So, for the 50 period moving average, it allows you to write, i would say more towards the medium term, long minimum term trend. If you're on the right, you know shorter term trend, you can go with the 20 period moving average.

If you want to go with a longer term trend, you can go with even you know, 100 or even the 200 period moving average. So hopefully, by now you understand what i'm sharing with you is that the concepts is what matter? Don't focus too much on the exact parameter like the 50ma and whatnot, because that is really you know not how you you understand right and get better at trading. Okay. Now, if you've enjoyed this training so far and you'll learn more trading strategies and techniques right, then you can actually go down to this website here.

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So with that said, right i'll put the link somewhere below this video. So you can get your hands on it with that's it. I wish you good luck. Good trading i'll talk to you soon.