Finding opportunities using moving average support levels

Understanding how to trade using key moving averages provides traders with an important tool when looking for trading opportunities. The most widely used moving average periods are the 20, 50 and 200. Moving averages help identify support levels in uptrends and resistance levels in downtrends and can be applied to any chart with any time horizon. In the case of an uptrend, traders can enter a long position on the second period candlestick after the moving average support level has been confirmed. A stop-loss should be placed just below the moving average. As long as they are acting as support, the uptrend should continue until prices break below the moving averages

ADAPTED OPTION STRATEGY: LONG RISK REVERSAL

A long risk reversal option strategy can be used when you are bullish on the market and uncertain about volatility. Its risk/reward is the same as a LONG FUTURES position except that there is a flat period of little to no gain/loss. Profit increases as prices rise above the long call strike price. Loss increases as prices fall below the short put.

LONG RISK REVERSAL: Leg 1

Trading Symbol OZW U7
Option Type CALL
Option Strategy BUY
Strike 435
Expiration Sept 2017

LONG RISK REVERSAL: Leg 2

Trading Symbol OZW U7
Option Type PUT
Option Strategy SELL
Strike 430
Expiration Sept 2017

ADAPTIVE FUTURES STRATEGY

Trading Symbol ZW U7
Strategy LONG
Entry Point 439.50
Target 445.75
Stop Loss 443.25
Contract Expiry Sept 2017

FINDING OPPORTUNITIES USING MOVING AVERAGE SUP- PORT LEVELS: ZW U7 JUNE 2017

ACTUAL OUTCOME

POTENTIAL GAIN PER CONTRACT

As a trend following strategy, substantial upside can be expected. The position can also remain opened until either the options expire or the price breaks below the rising 50-period moving average (used as a trailing-stop to protect profit).

POTENTIAL DOWNSIDE PER CONTRACT

If the price falls below the 50-period moving average, the position is closed with a limited loss.

Using moving average support levels happening now

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