The simplest way is to just plot a single moving average on the chart. If price action tends to stay below the moving average, then it indicates that it is in a DOWNTREND.

So you do just that. As it turns out, traders just reacted to the news but the trend continued and price kept heading lower! What some traders do — and what we suggest you do as well — is that they plot a couple of moving averages on their charts instead of just one.

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This gives them a clearer signal of whether the pair is trending up or down depending on the order of the moving averages. On your chart, it would look like this:.

As you can see, you can use moving averages to help show whether a pair is trending up or down. Combining this with your knowledge on trend lines, this can help you decide whether to go long or short a currency.

You can also try putting more than two moving averages on your chart. Success is a process that continues, not a status that you reach. If you are alive, there are lessons to be learned.

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