WMA 5, 10, 100 Trading System

WMA 5, 10, 100 Trading System is based on three moving averages. WMA is the average value times the different weighted factor to the different dots data. Buttechnical analytically WMA means where the weight experiencing weight loss arithmetically. At n-day WMA on recent n weight and the value of the 2 nd weight is n-1 and so on until it reaches zero value.
WMA 5, 10, 100 Trading System
In order to set WMA indicator you need to set three types of settings WMA5, WMA20 and WMA100.
HOW TO USE
WMA5, 20 and 100 are one of the ways and techniques that can help investors to enter a market whether to SELL or BUY. How WMA helps investors? I will explain in this chapter to help you use WMA as one of the indicators when you are trading. However WMA as a disadvantage because it can ignite a lot of FALSE SIGNAL if you make wrong readings and only based on WMA. WMA is not suitable to be used alone. It must be combined with other indicators as I mentioned in earlier chapters. How to use this indicator? I will explain with the graph below:
WMA 5, 10, 100 Trading System
OPEN SELL POSITION -
Make sure you open SELL position after WMA20 (yellow) crosses with WMA5 (red) as shown on the graph above.
- If WMA20 (yellow) and WMA5 (red) cross and nearing WMA100 for crossing, you can HOLD your SELL position because when WMA20 (yellow) and WMA5 (red) cross at WMA100 (white) the value or rate of bearish will increase.
- Through WMA techniques it is quite hard to determine or gain maximum pip profit unless you refer to other indicators as support for you to close SELL position.
- However if you have entered SELL position when WMA20 (yellow) cross with WMA5 (red) you can close your position after the next crossing happens. It means that when WMA 5 (red) crosses with WMA20 (yellow) you must choose CLOSED position SELL.
OPEN BUY POSITION -
Make sure you open BUY position after WMA5 (red) crosses with WMA20 (yellow) as shown in the graph above.
- If WMA5 (red) and WMA20 (yellow) cross and nearing WMA 100 (white) for the next crossing, you can HOLD your BUY position because when WMA5 (red) and WMA20 (yellow) cross at WMA100 (white) the value or rate will increase (bullish) and keep on increasing.
- Through WMA technique it is quite hard to determine or gain maximum pip profit unless you refer to other indicators as support for you to close your BUY position.
- However if you entered BUY position when WMA5 (red) crosses with WMA20 (yellow) you can close your position after the next crossing takes place. It means that when WMA20 (yellow) crosses with WMA5 (red) you need to CLOSE your BUY position.
WMA 5, 10, 100 Trading System
It is not enough just by using WMA 5, WMA 20 and WMA 100 because WMA 5, WMA20 and WMA 100 are not consistent in trend. There will be a lot of FALSE SIGNAL formed through this indicator especially when you refer to smaller TIMEFRAME such as M1, M5, M15 and M30. There must be additional indicators that function as a FILTER to avoid false signal. Below I listed what are the advantages and disadvantages and the best way to maximize the usage of this technique:
Enter SELL or BUY position after WMA 5, WMA 20 intersect and you can maintain the position of SELL or BUY is WMA 5 & WMA 20 intersect at line WMA 100.
• Take profit after the next intersection takes place. For example, you enter SELL position after WMA 20 (yellow) intersect with WMA 5 (red) so, you will need to CLOSE the SELL position after the next intersection takes place no matter what happen in the profit/loss that you will face. The same goes if you enter BUY position.
• Never enter SELL or BUY position in the middle of WMA 5, WMA 20 and WMA 100
because at this stage there might be a sudden change of trend.
• Never depend only on WMA 5, WMA 20 and WMA 100 without taking other indicators into account.
• Make sure you use these indicators (WMA 5, WMA 20 & WMA 100) together with indicator RSI or STOCHASTIC.
• Make sure you refer to all TIMEFRAME in order to avoid any mistake when entering trend. Begin from bigger TIMEFRAME to smaller TIMEFRAME. For example MN, W1, D1, H4, H1, M30, M15, M5 & M1.
• The best TIMEFRAME are W1, D1, H4 and H1.
• Lastly, be confident in the position that you have entered by relaxing yourself. Follow and trust the indicators that you are using.
WMA 5, 10, 100 Trading System

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