Spaghetti FX Strategy: Innovative Application of Moving Averages
Spaghetti FX trading strategy is a clear demonstration that thanks to the innovative analysis of moving averages trading can be profitable, even using only them.
How SpaghettiFX strategy works
A very good idea was taken representing two sides of the market: long-term trades and short-term trades. With the help of two sets on moving averages with different periods we can clearly see how they are displayed. But they are not easy to trade on, because they are purely graphical representations of the two sides. And it is not easy to understand when there is an opportunity to enter, to exit, to trade or not to trade.
Therefore, to read them undeniably were created two new indicators - Spaghetti FX and Spaghetti FX signal.
Spaghetti FX is indicator synthesized from two types of moving averages: fast and slow.
It is very important to emphasize that these indicators have no re-rating and are based on a single currency and a single time frame, so they can be easily verified.
Spaghetti FX indicator has four components:
- Red Line (Fast MAs) - displays the spread of the red moving average. If the red line is below 0, then the red MAs are pointing down (short positions). Conversely, if they are above the 0 line, it indicates that we will open long positions.
- Blue Line (Slow MAs) - as above, but for the blue moving average. If the blue line is below 0, then the blue MAs point down (short). Conversely, if they are above the 0 line, indicates that they are long.
- Light gray histogram (Spread) - shows the gap between the two sets of moving averages. The wider it is, the stronger and more stable the trend. This can also be used as a trend indicator. Above 0 we have bullish trend, below 0 is bearish.
- Dark gray histogram (Amplitude) - shows the total spread of the two sets of moving averages. From fast MAs to slow MAs.
Spaghetti FX indicator signals
- Fat Blue - strong bovine
- Blue - bovine
- Red - bearish
- Fat Red - strong bearish
Experts ForTrader.org magazine believe that with the Spaghetti FX indicator, you will be able to understand what the two major market participants (long-term and short-term trades) are doing and how they relate to each other, which will positively affect the profitability of your trade.
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