I have received a lot of questions from readers asking me how to use the moving average in trading.
Therefore I will like to share with you guys how I make use of the 400 exponential moving average in trading.
If you plot the 400 EMA on your chart, you can see that it acts as a very strong level of support and resistance.
From the picture above, you can see that the 400 EMA manages to hold or repel the price. However they are also times where the price will break through it.
Therefore the 400 EMA at time makes a good point of entry for a trader.
Please note that the 400 EMA works best when the market is ranging
However I am not saying that you will enter a trade whenever the price hits the 400 EMA as there are also times where the price will break through it
As a trader, we cannot enter a trade based on the 400 EMA alone, we need to have other criteria or indicators that can gives us a confirmed entry.
If you take a look at the chart below, you can see that the EURUSD has hit the 400 EMA and get repelled by it
For the trade copier, we have entered a SELL trade on the EURUSD which I have shifted the stop loss to breakeven. So when the market opens, it is either a breakeven trade or a winning trade.
The reason why I enter the trade is not just because it has been repelled by the 400 EMA, there are other conditions to qualify a trade which I cant share in this post
Therefore I just want to let you know that the 400 EMA is a very strong level of support and resistance that you can use in your trading.
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