One sweet way to use moving averages is to help you **determine the trend**.

The simplest way is to just **plot a single moving average on the chart**.

When price action tends to stay above the moving average, it signals that price is in a general **UPTREND.**

If price action tends to stay below the moving average, then it indicates that it is in a **DOWNTREND.**

**The problem with this is that it’s too simplistic.**

Let’s say that USD/JPY has been in a downtrend, but a news report comes out causing it to surge higher.

You see that the price is now ABOVE the moving average. You think to yourself:

“ ** Hmmm… It looks like this pair is about to shift direction. Time to buy this suckerrrr! ** ”

So you do just that. You buy a billion units cause you’re confident that USD/JPY is going to go up.

Bammm! You get faked out!

As it turns out, traders just reacted to the news but the trend continued and the price kept heading lower!

What some traders do, and what we suggest you do as well, is that they ** plot a couple of moving averages on their charts instead of just ONE ** .

This gives them a clearer signal of whether the pair is trending up or down depending on the order of the moving averages.

Let us explain.

In an uptrend, the “faster” moving average should be above the “slower” moving average and for a downtrend, vice versa.

For example, let’s say we have two MAs: the 10-period MA and the 20-period MA. On your chart, it would look like this:

Above is a daily chart of **USD/JPY**.

Throughout the uptrend, the 10 SMA is above the 20 SMA.

As you can see, you can use moving averages to help show whether a pair is trending up or down.

By combining this with your knowledge on trend lines, this can help you decide whether to go long or short a currency pair.

You can also try putting more than **two moving averages** on your chart.

Just as long as lines are in order (faster __MA__ over slower MA in an uptrend, slower MA over faster MA in a downtrend), then you can tell whether the pair is in an uptrend or in a downtrend.

Lesson 6: What is a Japanese Candlestick? Lesson 7 :Japanese Candlestick Anatomy Lesson 8:Basic Japanese Candlestick Patterns Lesson 9: Single Candlestick Patterns Lesson 10: Dual Candlestick Patterns Lesson 11: Triple Candlestick Patterns Lesson 12:Japanese Candlestick Cheat Sheet Lesson 13: Candlesticks with Support and Resistance Lesson 14: Common Mistakes That New Traders Make With Japanese Candlesticks Lesson 15: Summary: Japanese Candlesticks

Lesson 16 : Fibonacci Trading Lesson 17: How to Use Fibonacci Retracements Lesson 18: Fibonacci Retracements are NOT Foolproof Lesson 19: How to Use Fibonacci Retracement with Support and Resistance Lesson 20: How to Use Fibonacci Retracement with Trend Lines Lesson 21: How to Use Fibonacci Retracement with Japanese Candlesticks Lesson 22: How to Use Fibonacci Extensions to Know When to Take Profit Lesson 23: How to Use Fibonacci to Place Your Stop so You Lose Less Money Lesson 24: Summary: Fibonacci Trading

Lesson 25: What Are Moving Averages? Lesson 26: Simple Moving Average (SMA) Explained Lesson 27: Exponential Moving Average (EMA) Explained Lesson 28: Simple vs. Exponential Moving Averages Lesson 29: How to Use Moving Averages to Find the Trend Lesson 30: How to Use Moving Average Crossovers to Enter Trades Lesson 31: How to Use Moving Averages as Dynamic Support and Resistance Levels Lesson 32: How to Use Moving Average Envelopes Lesson 33: How to Analyze Trends With Moving Average Ribbons Lesson 34: How to Trend Trade with Guppy Multiple Moving Average (GMMA) Lesson 35: Summary: Using Moving Averages

Lesson 36: How to Use Bollinger Bands Lesson 38: How to Use the MACD Indicator Lesson 37: How to Use Keltner Channels Lesson 39: How to Use Parabolic SAR Lesson 40: How to Use the Stochastic Indicator Lesson 41: How to Use RSI (Relative Strength Index) Lesson 42: How to Use Williams %R (Williams Percent Range) Lesson 43: How to Use ADX (Average Directional Index) Lesson 44: Ichimoku Kinko Hyo Lesson 45: Trading with Multiple Chart Indicators Lesson 46: What is the Best Technical Indicator in Forex? Lesson 47: Summary: Popular Chart Indicators