Trading With Moving Averages - MT4/MT5 Resources

EAcpu | 3 reads | 0 comments | 2026-05-03

I don't typically use moving averages for forex trading, moving averages are just price distortions, and while distortions can be a useful way to filter out random "noise" in the market, they are not the most effective method. But using an average high and low can be a good way to choose appropriate entry and exit levels. The complete system for trading with moving averages can be found here but the basic details are this –

The opening price is compared to the market closing price four months (80 days) ago, if the price is higher now, the trend is up and the system is limited to long trades, if the price is lower now, the trend is down and we only take short trades.

Place an "open price" order every day until that level is hit and open a position, then take a long trade in an uptrend when the price drops to (yesterday's low + yesterday's low)/2. Set up a short trade and open the position when the price rises to (yesterday's high + the day before yesterday's high) / 2 in a downtrend. This allows you to get prices that are reasonable and in line with the direction of the long-term trend. If you get another good price the next day, you can open another deal.

Protect every trade with take profit/limit orders. The long profit margin is set to (yesterday's highest point + the previous day's highest point)/2, and the short profit margin is set to (yesterday's lowest point + the previous day's lowest point)/2. If it is not reached, adjust limit orders on all trades daily. You may end up with more than one trade open at the same time, but they will all be closed at the same time.

The results over the past decade (early 2000 to late 2010) have been pretty good. If there is no stop loss, the result is -

EUR/USD. 553 trades, 71.25% winning. The ratio of winning points to lost points is 1.50 to 1.
GBP/USD. 562 trades, 66.37% winning. The ratio of winning points to lost points is 1.24 to 1.
USD/JPY. 496 trades, 65.93% winning. The ratio of winning points to lost points is 1.33 to 1.
USD/CHF. 593 trades, 70.66% winning. The ratio of winning points to lost points is 1.64 to 1.
USD/CAD. 550 trades, 67.45% winning. The ratio of winning points to lost points is 1.27 to 1.
AUD/USD. 530 trades, 66.98% winning. The ratio of winning points to lost points is 1.24 to 1.

I've suggested several ways to improve the system on my blog, and if anyone would be willing to share any ideas here on how they could improve this system (i.e. by reducing the size of the losers while still keeping the number of winners vs. losers good) I would be very grateful for their ideas and suggestions.