Moving Averages (MA)
The most widely used Forex indicator is the moving average indicator, due to its simplicity and at the same time because of the effectiveness it offers.
Moving averages can be of 3 types:
- Simple
- Exponential
- Weighted.
They are fixed in “periods” to be analyzed and, therefore, offer an average of the price trend that is taken into account. The most used trading method is to insert a fast-moving average (10 periods) and a slow-moving average (50 periods), in order to obtain the following trading signals:
- When the fast MA crosses the slow one up: BUY
- When the fast MM crosses the slow one down: SELL
The type of spreads that you’ll see on a trading platform depends on the forex broker and how they make money.
There are two types of spreads:
- Fixed
- Variable (also known as “floating”)
Fixed spreads stay the same anyhow of what request conditions are at any given time. In other words, whether the request is unpredictable like Kanye’s moods or quiet as a mouse, the spread isn’t affected. It stays the same. Fixed spreads have lower capital conditions, so trading with fixed spreads offers a cheaper volition for dealers who do n’t have a lot of plutocrat to start trading with. Trading with fixed spreads also makes calculating sale costs more predictable.
variable spreads are always changing. With variable spreads, the difference between the shot and ask prices of currency dyads is constantly changing. Variable spreads are offered bynon-dealing office brokers. Non-dealing office brokers get their pricing of currency dyads from multiple liquidity providers and pass on these prices to the dealer without the intervention of a dealing office.
