Handling of Moving Averages

There are 2 ways to describe current trend using MA's.

1) If rate rises bottom-up the MA then it can be considered as beginning of bull market. And on the contrary if rate lowers top-down the MA then it is beginning a bear market.

2) Look at your MA and make out its ending. If the indicator has risen comparing to a previous day then we are still on bull market. You have to wait till the indicator changes its direction. That way the rate can be higher than MA but the trend can be still considered as bear market and vice versa.

I prefer using second method. It gives me better results, but keep in mind that using it, you have to use a higher smoothing parameter. Good numbers would be 21/50 days to the first method and 100 days for the second one.

For the first method I would consider MA as a resistance/support level. The rate frequently bounce off this line. Check the history of your currency pair and trial and error the best value for your smoothing parameter.