The 2 handed trading set is often used in forex trading, especially by beginners, to accurately forecast the turning points in the market. The set identifies two essential price action signals distinct by their differing position and signal time. It plumbing many of the same trades in a short time frame. It is not an FX strategy used by many traders because of the overpowering weakness of the pip and the difficulty in pondering numerous possible short-term trades.

To compare the MA with the SMA is very easy, just switch yourlestick chart to the MA style and see for yourself. Most charting packages have different ways of handling these trades, but I am going to show you an indicator that works on both pairs. I am going to call it the Mutual Market Support indicator. The blue line is the SMA (Simple Moving Average), and the red line is the MA (mentioned above).The blue line has a recommended value of 20 for the SMA adjustment so that your indicator starts to work more accurately. When the blue line is above both the SMA and the MA, it is an indicator to sell. When the MA crosses the blue line below the SMA, it is an indicator to buy.

The red line in this example is just a reference point, the blue line is where we would buy if the market were to top up the blue line concerning the MA. Let’s go over these next few lines very quickly and decide what they mean.

The top part of the red line is the SMA (Simple Moving Average). A blue line is just a guide number. The red line has a relationship with the blue line. You will notice that the faster the MA crosses below the slower the blue line, and the further the market is from becoming overbought or oversold. Conversely the faster the MA crosses above the slower the blue line, and the further the market is from becoming oversold or overbought.

Conversely, the faster the MA crosses apart from the blue line, the further the market is from becoming oversold or overbought. When the fast-moving average lines meet at the top of the red line, this is an indication to buy. If the short-moving average lines cross to the downside, this is going to indicate to sell.

The same would be true with the blue line and the red line. The fast-moving average line would have a relationship with the red line that is opposite to the way the fast-moving average line is related to the blue line.

I would like to anticipate that some traders might be a bit confused by all this theory and that’s why I’m sharing this info. So if you’re looking or wanting to learn how to trade forex, dive into some theory and clear your mind from all this theory that can be confusing. Working from the pivot points is a great way to keep the risk of your trades to a minimum and maximize your upside potential.