{"id":8652,"date":"2011-08-08T08:00:40","date_gmt":"2011-08-08T12:00:40","guid":{"rendered":"http:\/\/club.ino.com\/trading\/?p=8652"},"modified":"2011-08-05T16:23:37","modified_gmt":"2011-08-05T20:23:37","slug":"simplifying-complicated-charts","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2011\/08\/simplifying-complicated-charts\/","title":{"rendered":"Simplifying Complicated Charts"},"content":{"rendered":"

\"\"On the Trader's Blog you've heard us talk plenty about how to simplify your trading. As a matter of fact, you've heard Adam preach about keeping it simple over the years. Today we've asked Bill Poulos from Profit's Run to share with us how he keeps his trading method simple by using a simple indicator that we could all benefit from. To find out more about Bill Poulos visit his website here<\/a>.<\/p>\n

One of the problems that many traders run into is trying to find the perfect combination of indicators that will lead them to the perfect trading method.\u00a0 Not only is this a problem for new traders but we find that many experienced traders continue to over complicate their charts with too many indicators.\u00a0 They often think that the more indicators they can get on the chart the more successful they will be.\u00a0\u00a0\u00a0\u00a0 This is usually not the case and only leads to more confusion on the part of our entries. The concept of keeping things simple works especially well when applying it to our trading strategies.\u00a0 The key for many trading methods is to simply know the trend of the pair and then know when to buy or sell that pair.<\/p>\n

With that being said, I wanted to spend a few minutes discussing one of the most useful indicators that a trader can use.\u00a0 Not that this is the perfect indicator, but it is one that every trader should use to help them know where the market may be going.\u00a0 The indicator that I'm referring to is the Simple Moving Average.\u00a0 With the idea of keeping things simple, this indicator even has the word \u201csimple\u201d as part if its name.<\/p>\n

So with the idea of keeping things simple, lets talk about how this indicator can help us with our trading.\u00a0 There are two things that we find useful when looking at the Simple Moving Average.\u00a0 The first thing is to look at the direction it is heading.\u00a0 This will tell us that the momentum is either going up or going down for the time frame we are looking at.\u00a0 This momentum should show us the direction we should be looking to trade.\u00a0 For example, if the Simple Moving Average is heading up then we should be looking to buy the pair.\u00a0 If it\u2019s moving down then we would be looking to sell the pair.\u00a0 This is a pretty simple concept that many traders seem to ignore.\u00a0 The second thing the Simple Moving Average can show us is where there may be support or resistance.\u00a0 When looking at this indicator you will find that the price has a tendency to want to move away from it, either as a bounce off of it or a break through it.\u00a0 In either case it will give us an idea of what the price wants to do.<\/p>\n

Using the Simple Moving Average as part of our trading method will help us with two of the most important things in charting.\u00a0 Those two things are knowing the trend and knowing support\/resistance areas.\u00a0 When we know these two things we can then begin to look at entering into our trades based off of our entry rules.\u00a0 These entry rules can be based off of price action or some other indicator the shows us it would be a good time to enter the trade.<\/p>\n

Let's see how we can use this indicator to know the direction to trade.\u00a0 When looking for entries into a trade we want the following alignment of price and the Simple Moving Average.<\/p>\n

Buy:\u00a0 Simple Moving Average pointing up and price above it.<\/p>\n

Sell:\u00a0 Simple Moving Average pointing down and price below it.<\/p>\n

When we are in this alignment we know the chart is in a place to enter a trade based off of our entry rules.\u00a0 Remember, we want to know the trend and trade with that trend.\u00a0 Even if we don't get in at the perfect time the trend will generally push us in the direction it is heading.<\/p>\n

Finally, with the infinite periods we can choose from, which is the most effective Simple Moving Average to use?\u00a0 This is a great question and one that you will get many answers to.\u00a0 You will see traders using anything for a 5 period to a 200 period average with the whole numbers being most commonly used such as 10, 20, 50 etc.\u00a0 In most of the methods we use, the 40 period Simple Moving Average is an effective tool to help us with our trades.<\/p>\n

Regardless of the period we are using, keeping things simple by using an effective indicator like the Simple Moving Average can keep your charts easy to read.\u00a0 In addition, you will be entering in the correct direction every time you place your trades.\u00a0 Remember, more is not always better!<\/p>\n

Good Trading,<\/p>\n

Bill Poulos, Profits Run<\/p>\n

 <\/p>\n

To find out how you can use these uncomplicated charts to predict with a high level of accuracy, which way any of the 6 major Forex pairs are headed in the next 8 hours, take a look at my new private training website here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

On the Trader's Blog you've heard us talk plenty about how to simplify your trading. As a matter of fact, you've heard Adam preach about keeping it simple over the years. Today we've asked Bill Poulos from Profit's Run to share with us how he keeps his trading method simple by using a simple indicator […]<\/p>\n","protected":false},"author":41,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[1488,1767,3512,7948,840,4019],"class_list":["post-8652","post","type-post","status-publish","format-standard","hentry","category-general","tag-bill-poulos","tag-charts","tag-forex-profit-multiplier","tag-guest-bloggers","tag-profits-run","tag-simple-moving-averages"],"yoast_head":"\nSimplifying Complicated Charts - INO.com Trader's Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ino.com\/blog\/2011\/08\/simplifying-complicated-charts\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Simplifying Complicated Charts - INO.com Trader's Blog\" \/>\n<meta property=\"og:description\" content=\"On the Trader's Blog you've heard us talk plenty about how to simplify your trading. 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