Moving Averages in a Trending Market.

If you’re not a fan of the ADX, you can also make use of simple moving averages.

Check this out!

Place a 7-period, a 20-period, and a 65-period Simple Moving Average on your chart.

Then, wait until the three SMAs compress together and begin to fan out.

If the 7-period SMA fans out on top of the 20-period SMA and the 20 SMA on top of the 65 SMA, then the price is trending up.

On the other hand, if the 7-period SMA fans out below the 20-period SMA, and the 20 SMA is below the 65 SMA, then the price is trending down.

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