3 Simple Moving Average Forex Strategy

This is a really simple strategy based on one of the most popular trading indicators: the simple moving average (SMA).

This forex trading strategy suits beginners.

Trading Tools/Settings

Indicators: 100 Simple Moving Average, 25 Simple Moving Average, 10 Simple Moving Average
Time frame(s): 30 min and above
Trading sessions: All
Currency pairs: All

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Download the 3 Simple Moving Average Strategy.

GBP/JPY Daily Chart Example

simple-moving-average-cross

Trading Rules

Long Entries:

  • 25 SMA above 100 SMA
  • 10 SMA above 25 SMA and 100 SMA

Conservative traders: Exit the trade when 10 SMA crosses 25 SMA and 100 SMA from above, this creates a valid sell trade.

For aggressive traders: close the long trade when the SMA 10 crosses below SMA 25 from above.

Short Entries:

  • 25 SMA below 100 SMA
  • 10 SMA below 25 SMA and 100 SMA

Conservative traders: Exit the trade when 10 SMA crosses 25 SMA and 100 SMA from below, this creates a valid buy trade.

For aggressive traders: close the short trade when the SMA 10 crosses above SMA 25 from below.

Advantages and Disadvantages of Using Simple Moving Average Cross-over Systems

Advantages: It’s a widely used technique that always keep you on the right side of the trend. You never trade against the prevailing trend.

Disadvantages: This technique doesn’t perform very well in range-bound markets.

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