Olymp Trade offers the best indicators and one of them is SMA or you can also call it Simple moving average. It is a trend indicator that can helps to identify the current trend and the possible reversals. The simple moving average is formed by computing the average price of a security over a certain number of periods. This indicator is widely used by traders, however, you need to remember a single Sma won’t give you accurate data.
Therefore, In this article, I will cover how to use two SMA i.e SMA 7 and SMA 21 together that you can easily use on a short time frame chart.
Configure SMA 7 and SMA 21 on the Olymp Trade Platform
Once you, logged in. click on the indicator button. and search for SMA in the menu. next click on the SMA twice and change the timer to 7 and 21. you can also change the colour and darken the line for better understanding. I have selected green for 7 and red for 21.
How to open a buy trade with the SMA pairs
As I said above these SMA pairs are best for short period. you can use them to open 5 min – 15 mins trade. The first thing you need to do is set the chart to 15 mins.
When the SMA 7 intersects SMA 21 and later the SMA 7 is moving above the SMA 21 in a bullish manner. It signals a bullish trend and here we can place a buy trade at 5 or 10 minutes.
How to open a sell trade with SMA Pairs
Just in the same way you need to focus on the intersection of two SMA. when they intersect each other and the SMA 21 is above SMA 7. in a downtrend just like given above. It signals a bearish trend and here we can open a sell position.
It’s your turn
Understanding the concept of a simple moving average is very important as most of the indicators are made from the combination of the moving average. I hope you have understood the concept and how to trade with the simple moving average. Now It’s your turn to practice this strategy properly in the Olymp Trade demo account and keep the record of how many trades you made right. Once, you are confident enough you can move the Olymp Trade real account and trade with the real money.