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Moving Average crosses in forex refer to the crossing over of a short term and longer term period moving average on a given chart.
This is supposed to signal an entry when combined with other lagging indicators. Either that or the price crossing.
What I have found with using moving average crossovers on shorter term timeframes using systems from so-called experts publishing ebooks online, is that using them will lose you a lot of money.
That’s not to say though that you may be able to create a sound system using moving average crosses.
In fact my newbies course successfully uses the price crossing a moving average on a 30 minute chart combined with some more reliable custom indicators than most.
This provides an excellent introduction to forex as well for those of you who are new to this exciting market.
link: http://www.fasttrackforex.com/course
I also utilise moving averages in my advanced forex course which is a strategy to use fibonacci points and moving averages and in my coaching program in my more highly developed technical trading systems which add a new dimension to successful trading - that of winning!
A moving average takes the average price over a time period and creates a smooth line.
Thus we can identify the trend over different terms.
Applying a filter to a moving average crossover of price would mean for example to go long only when the moving average is signalling an upward trend over its term and to go short, only when the trendline (the moving average in this case) has a downwards gradient.
Moving averages create losses because they do not function as crossover indicators in rangebound markets. Trend identification is therefore essential.
One tool that does this is the Nostradamus custom indicator forex software. The reason I mention it here is that it has been used on trading floors for years (ie since before advent of the internet for trading) via the Reuters terminal - as a number between 1-100.
