Do professional traders use moving averages? – Day Trading Vs Swing Trading Forex

Mapping the long-end of the spectrum, traders often use daily and weekly moving averages (EMAs) for their risk-on trades. This is a fundamental method of using the daily low and long-term highs of the markets in a daily basis to make financial trades.

The problem with using the EMA is that you can’t do daily, weekly trading on it. Traders who want to use the EMA have to have their own separate trading system that tracks every trade on their behalf, which can only be set up if your broker and your trading system have an independent relationship.

So the EMA is more of a last resort method for those traders who might not be able to use moving averages without some financial risk and who want to have a more complete picture of the market instead of relying on looking at just one of the moving averages that are used in your daily trading.

Daily, weekly or monthly moving averages are still useful when it comes to trading on the market.

Daily Moving Average

A daily moving average measures how much the market is up or down. For those whose primary interest is in buying or selling, this method represents market sentiment.

A price can dip a tiny bit or climb a tiny bit, but ultimately, the price is likely to rise.

Using the daily moving average allows traders to make their best trading decisions and also give them a general idea on what the market is like from a daily-to-weekend-to-monthly-backward-and-up basis.

Weekly Moving Average

Weekly moving averages are even easier because they allow traders to see how the market is doing on a weekly basis.

A chart can be used to tell you when the market is up or down and a moving average can be used to see where and what price the market has been selling for the last couple of days.

As they both use the same reference points, traders will use different trading strategies if they trade the two different means of representing the market.

Monthly Moving Average and Moving Average of One Month

So let’s say you want to buy some shares in XYZ Corp at $13.00 and you’re not sure what you’re doing. You also want to avoid the risk of losing money when you put your money into their stock.

Using the monthly moving average, you might use a 20-day moving average for each of those 20 consecutive days that the stock is currently above

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