20 and 60 Moving Average Practical Tips CXM Forex

The 20 and 60 simple moving averages, when combined with multi-cycle analysis, can effectively connect each market segment.

Look at it intuitively:

The position marked by each circle is an effective pressure or support for the market formed by the moving average.

For the box area, those moves that go beyond the moving average range tend to come from larger-cycle moving average suppression or support, as shown in the chart below:

This is the embodiment of the cooperation of different periodic moving averages, so the analysis of the market needs to start from a multi-cycle perspective. The direction judgment cannot be separated from the assistance of the moving average. The logic behind the intersection of different indicator systems in the large-cycle resonance is that the operation of large funds will leave traces on the K-line and indicators, thus forming a common effective position.

How can it be used?

When the price hits the 60 moving average for the first time, it can be regarded as the price reaching a key node and a reversal may occur. Whether this reversal is established depends on the performance of smaller cycles. Taking CXM foreign exchange as an example, when there is a strong pattern of breaking through the 20 moving average in the small cycle chart, the combination of large and small cycles can confirm the entry direction.

Returning to this picture: Although the market before the arrow K line has touched the key node, it has not formed an effective breakthrough pattern to the 20 moving average, so the node order has not been established. Until the arrow K line appeared, the market made an obvious fake move and broke through the 20 moving average strongly. At this time, combined with the analysis of the size of the cycle, it can be confirmed that the empty order is established, that is, the effective entry opportunity of the large cycle node. Vice versa.

The method is very simple. The moving average can not only judge the general trend, but also be used to accurately enter the market. Many times I do not recommend simply using bare K, because it is not clear enough to grasp the overall trend. Even if only one or two moving averages are added, the judgment will be much more convenient. Of course, the application of moving averages is far more than this. I just share the ideas in my system for your reference. How to use it depends on the characteristics and personal insights of my own trading system. The reason why I chose the two lines 20 and 60 is because I am difficult to adapt to the multi-moving average system, which is entirely due to personal experience. In the practice of CXM foreign exchange, everyone should also be flexible according to their own situation.