Moving Average Example

Moving Averages, Historical ExamplesThe top chart below show an example of how moving averages, when confirmed by price action, can signal trading opportunities.

In second chart we see moving averages applied to the AUD/NZD currency pair (although examples for this are easily found with all pairs). Notice the Three Outside Up pattern that penetrates the 20-moving average (Black Line) at the same time the 50-Day SMA (Yellow) crosses over the 200-Day SMA(Green). This reversal pattern, and the fact that price bounces off of the 200 moving average, shows that the downside momentum is lost, and signals that a rally may follow.

Here we see a classic sequence of candlestick patterns combine with moving average signals.

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