What is MA50? How does it work?

The moving average 50, like all moving averages, calculates the average value of the price over a period of time from the nearest candle back. Thus, the MA50 is the line that represents the average price of the previous 50 candles, on the daily frame it will be 50 days. The price at which the MA50 is averaged will be the closing price.

Here's how you can add MA50 on tradingview:

After adding the MA, you go to set the settings to period to 50.

MA 50 - Applying to find opportunities to enter

Many traders rely on support and resistance to find entry points, I am also one of them. However, in trends like the one below, what do you do?

The price has never tested support again, and as such, it is very difficult to find an entry point based on support, so we will stay out for a long time until we enter, when the market reverses. direction.

When you meet such trends, you need to find a new type of support and resistance, and that's when the MA50 comes into play:

Notice that the price did not touch the horizontal support on the chart but hit the MA50 quite many times, creating a good opportunity to enter a very nice order at the test points. Note that the price does not have to exactly touch the MA, it can be close to or exceed a little bit, because the MA line represents an important price range, not an exact price.

Every time the price hits the MA50 in the trend, you just need to find a pin bar, fakey, or a certain candlestick pattern showing a reversal is enough to enter the order. The MA 50 is a very nice dynamic resistance.

MA 50 - Use to surf long waves

When surfing a long wave, many traders were stopped out (exit orders) after only a small correction of the price. Because they moved the stop loss too close to the price.

It's like chasing a girl, if you stick her too close, she will run. But if you give her space, your chances of winning are higher.

Let the market have space to "breathe", to freely fluctuate once the market still respects the trend structure, looking forward to surfing the longest waves. And the MA50 is a great trailing stop.

You can move the stop loss 10-20 pips from the MA, when the price hits this level, it's time to exit.

MA 50 - Applying to filter high probability reversals

When trading reverses (catching a bottom), timing - timing, is most important. If you go in too early, you will be susceptible to SL, if you enter too late, you will miss a long wave. Therefore, you can use the MA50 to filter out the highest probability reversals, and also the timing of entry.

If you want to Sell to catch the top on an uptrend, wait for the price to close below the MA50 before looking for a selling opportunity. Conversely, if you want to buy bottom in a downtrend, wait for the price to close above the MA50 before looking for buying opportunities.

The fact that the price closes above or below the MA50 also shows that the motivation is strong enough to find buying opportunities or not, because if you buy when the price is below MA50, or sell when the price is above MA50, the opportunity the win is very low, if not the definite loss.


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