Unlock the power of 100/200 bar MAs to limit risk in your trading

If you read my posts, or watch my videos on Forexlive.com, the 100 and 200 bar MAs are a key and important tool

The reason is those MAs are followed by many traders from around the world. Morevoer, they look at those MAs on the hourly, the daily and even the weekly and 5-minute charts.

Those traders look to define and limit risk by leaning against the MAs. If the price does find support (or resistance) on the “lean”, traders stand to benefit from the bounce.

Conversely, if the price moves through the MA with momentum, traders simple

• Exit with a small loss,
• Survive and
• Prepare for the next trade.

In this video, I show you what I mean by looking at some of the major JPY crosses. They have been trending to the downside, but each found support against a key 100/200 week MA and bounced. It is no surprise.

Moreover, on the trend move lower, they also followed the shorter term hourly MAs lower – using them to lean against on corrective moves.

The 100 and 200-bar MAs are key in my trading and analysis, and it should be for you too.

This article was written by Greg Michalowski at www.forexlive.com.