Part VI. Trading moving averages crossover. Commander in Pips: Once in this chapter we said that traders very often use not one, but two different MAs to clearly understand what trend is currently on the market. Also two MAs are more effectively safe trader from unwelcome trading due fake outs. Can you remind me how it could be done by using different MAs? Pipruit: Yes, Sir. I remember that. First, we should plot two MAs with different periods. One MA should have a longer period, while the second MA – a shorter period. For instance, they could be 15-period and 5-period. Once we’ve done this – then we treat the trend as bullish if the shorter term MA is above the longer term, and as a bearish when it’s vice versa – the short term MA is below long term. Also the application of two different MAs allows us to eliminate fake outs. If during some unwelcome splash on the market that could, by the way, penetrate short term MA, or even the long term one too, MAs themselves hold their position so, that the trend remains intact – then we can ignore this fake out and hold our trade. Commander in Pips: Absolutely, and what do you mean under “If… MAs themselves hold their position so, that the trend remains intact…”? Pipruit: It means that despite the splash of prices short term MA continue to stand above/below longer term MA and does not penetrate it. Commander in Pips: Good. But you should know not only how to use MAs for determining the trend, but also how to use them to get some clue that trend possibly is near to its end. Pipruit: Sounds interesting.