Trading CFD with the indicators ADX/DMI and MACD/OsMA

In an earlier post is the content about the ADX/DMI and the MACD/OsMA.

What are the MACD/OsMA and the ADX/DMI?

The MACD/OsMA and the ADX/DMI point out how the price trend behaves.  

The ADX/DMI analyzes the strengths of the trend; the MACD/OsMA analyzes how likely the trend is.  

In the post Trading Forex using the trading strategy123 trading signals is the two indicators described. 

How to analyze the price behavior using the MACD/OsMA and the ADX/DMI?

In the graph are the USD/CHF price line; the indicators ADX/DMI and the MACD/OsMA are at the button of the image.

ADX/DMI: How strong is the trend?

Between 8:15 and 9:00 is the DI+ and DI- line crossing each other; the DI+ starts to move higher than the ADX line; between 10:30 and 12:45 is the DI+ starting to get near the ADX line; in the same time period is the DI- moving closer to the ADX line.

MACD/DMI: How likely is the trend?

The MACD line crosses the signal line between 8:15 and 9:00 and the histogram starts to grow; between 10:30 and 11:15 starts the histogram to fall.

When to buy and when to sell?

A likely buy point would be between 8:15 and 9:00 as illustrated in the image with the indicators signal in mind; the sell point will be around 12:45 as the image illustrates with the indicator signals in mind.

Where to trade with the MACD/OsMA and the ADX/DMI?

PLUS500 offers the traders to trade with the MACD/OsMA and the ADX/DMI. The list of indicators is at the f(x) button on the trading platform.

If you would like to download the trading platform at PLUS500 and try it with the 25 euro welcome bonus click on this link for more information.

Please notice that your capital may be at risk trading CFD.

CFD Trading: The Simple Moving Average

The Simple Moving Average is an indicator that calculates the future price movement of the past.

Equation

Is the indicator based on a 10 period timeframe is the future price calculated from the past 10 prices. The equation is

(Price 1 + price 2 + price 3 + price 4 + price 5 + price 6 + price 7 + price 8 + price 9 + price 10) / 10 time period = Future price

Time period

The equation is simple which makes the simple moving average best in a trend-following market. The timeframe has also an impact on the calculated price; the longer the time period is the slower is the simple moving average to react on trend changes in the market.

Purpose

The simple moving average purpose is to find the trend changes in the market. The indicator is an indicator that should not stand alone in the decision to enter a trade.

The Simple Moving Average illustrated in a graph

In the graph is the simple moving average illustrated; the graph illustrates a blue line, red line and a green line; the blue line is the simple moving average based on a time period of 10; the red one is based on a time period of  20 and the green one is based on a time period of 50.

The green line responds later than the red and blue line.

The second indicator is the stochastic. The purpose is to verify the simple moving average.

When to enter a trade?

The green, red and blue line gives different indications on when to enter a trade as they are based on different time periods.

When the simple moving average is above the price line is the price bearish and bullish when the price line is below the price line.

The stochastic gave an indication at the time where the simple moving average crosses the price bar; around 7 o’clock the 10-10. The stochastic is also in a downtrend which indicates that the price is increasing as the price is moving away from the overbought zone. The indication is at the tops at the stochastic; they are getting lower and lower.     

Try the simple moving average

Which time period is best when a trader use the simple moving average is individualized; the trader have to try different time periods or place the simple moving average with different time periods at the same time as illustrated in the graph.

Where to trade with the simple moving average?

The CFD trading platform PLUS500 offers the traders the simple moving average as an indicator. The list of indicators is a the f(x) button on the trading platform.

Watch the review of PLUS500 or download the trading platform from their website from this link.

Please notice that your capital may be at risk trading CFD.