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.

FINDING OPPORTUNITIES USING MOVING AVERAGE SUPPORT LEVELS: GC G8 ON DEC 2017

ADAPTED OPTION STRATEGY: LONG RISK REVER- SAL

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.

BULL CALL SPREAD: Leg 1    
Trading Symbol OG G8    
Option Type CALL
Option Strategy LONG
Strike 1270.00
BULL CALL SPREAD: Leg 2    
Trading Symbol OG G8
Option Type PUT
Option Strategy SHORT
Strike 1260.00
Trading Symbol GC G8
Strategy LONG
Entry Point 1264.90
Target 1280.00
Stop Loss 1255.00
Contract Expiry FEB 2018

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.

ACTUAL OUTCOME

The Support/Resistance Overlap Happening Now

Japanese Yen: 6J

British Pound: 6B

About TRADING CENTRAL

TRADING CENTRAL is a leading investment research provider to financial market professionals. We offer traders investment strategies for all classes of assets: equities, indices, currencies, commodities and interest rates. Our market depth and knowledge are attributed to our acquired experience on trading floors of many banking institutions.

Technical analysis is our core business. Our award-winning methodology is backed by time-tested indicators. Our chartist and mathematical approaches match requirements of various investment styles, from intraday trading to swing trading and long term investments. Leading financial institutions rely upon our expertise and added value: 200+ leading global financial institutions in 45 countries trust TRADING CENTRAL.

TRADING CENTRAL Terms and conditions

The information provided does not constitute, in any way, a solicitation or inducement to buy or sell securities and similar products. Comments and analysis reflect the views of TRADING CENTRAL at any given time and are subject to change at any time. Moreover, they can not constitute a commitment or guarantee on the part of TRADING CENTRAL. The recipient acknowledges and agrees that by their very nature any investment in a financial instrument is of a random nature and therefore any such investment constitutes a risky investment for which the recipient is solely responsible. It is specified that the past performance of a financial product does not prejudge in any way their future performance. The foreign exchange market and financial derivatives such as futures, CFDs (Contracts for Difference), warrants, turbos or certificates involve a high degree of risk. They require a good level of financial knowledge and experience. TRADING CENTRAL recommends the consultation of a financial professional who would have a perfect knowledge of the financial and patrimonial situation of the recipient of this message and would be able to verify that the financial products mentioned are adapted to the said situation and the financial objectives pursued. TRADING CENTRAL recommends reading the «risk factors» section of the prospectus for any financial product mentioned. Head of Research at TRADING CENTRAL: Rémy GAUSSENS

TRADING CENTRAL is governed by the code of conduct of the association ANACOFI-CIF, association approved by the Financial Markets Authority and registered with ORIAS under number 17005458.

In the United States, TRADING CENTRAL AMERICAS, INC. is a Registered Investment Adviser (RIA) with the U.S. Securities and Exchange Commission (SEC) under IARD/CRD number 801-67210. Services are provided in the United States by TRADING Central Americas, Inc. TRADING Central will provide a copy of its most recent written disclosure statement without charge upon written request. Notwithstanding the foregoing paragraphs, nothing herein shall constitute a waiver or limitation of any U.S. person’s rights under relevant U.S. federal or state laws.

In Asia, TRADING CENTRAL ASIA LTD has received a license (number AWI815) from the Hong Kong-based Securities and Futures Commission (SFC) to conduct «Type 4» and «Type 5» regulated activities (Advising on Securitiesand Futures).

TRADING CENTRAL recommends that you read the legal and regulatory information and warnings about the information provided by visiting the following link: https://tradingcentral.com/media/1271/terms_of_use_web_ sites_en.pdf .