The forex market has been marked by high volatility during 2020, with the Covid-19 pandemic, trade wars, change in inflation rates and the US election, all coming together in a single year. These are the conditions where a moving average strategy can be a great tool for traders.
Moving averages is a popular technical indicator, used to smoothen out price movements. It achieves this by creating a price point that is constantly updated. This makes it easier to spot trends, allowing traders to see beyond the impact of short-term fluctuations within a specified timeframe.
There are several types of moving average strategies. Here’s a look at the most popular ones for forex trading.