9 Moving Average Trading Strategy

9 Moving Average Trading Strategy – Introduction

The 9 Moving Average trading strategy is about the effective use of the 9 Close MA (moving average). This refers to the average of the last 9 closing prices. Usually, TradingView and most popular exchanges offer this indicator for trading for free. In this post we explain our use of the 9MA, how to apply it and to what extent we attach value to this indicator.

At a glance – 9 MA Trading Strategy

Time required: 15 Minuten.

The 4 steps of the 9 Moving Average strategy briefly explained:

  1. Display the 9 moving average

    Display the 9MA ( moving average) on TradingView or directly on your exchange and check if the length is set to 9.

  2. Select the correct time frame

    Choose the right frame for your trade. The higher the time frame, the more meaningful the 9MA. We recommend daily candles.

  3. Finding an entry point

    Look for an open price just above the 9MA. The crossing of the 9MA indicates the entry point. Be sure to set a stop-loss order just below the 9MA.

  4. Take profit

    Tighten the stop loss order on the 9 moving average in profit. If the price falls to the SL you realized your profit. Alternatively, you can also rely on a trailing stop order.

Significance of the 9 Moving Average

If a price is above the 9MA, this is usually considered a bullish signal, the price tends to rise as a rule of thumb. The closer the price is to the 9MA, the higher the rise can be, if the breakout is already successful, the probability for a dip decreases further and further. Here is an example:

Breakout above the 9MA

In this example, you can see a crossing of the price above the 9MA (yellow). The confirmation of the second green candle confirmed the positive trend. At the upper Bollinger bands, one now sees corresponding resistance and the movement back to the moving average.

The same statement can be made on a falling price, this function is then reversed, see example:

Breakdown under the 9MA

Here we see by the confirmation of the second red candle, this is a downtrend. Only with the price movement towards the 9MA at the bottom (lower Bollinger bands), the price recovers again in the direction of the 9MA and builds a counter-trend.

9 Moving Average Trading Strategy – Application

Step 1: 9MA ( showing the moving average)

In the first step you have to add the moving average to your TradingView Chart. To do this, search for indicators and enter “moving average”.

Indicators at Bitfinex

The next step is to check the length of the moving average. We are working with a value of 9. This is the last 9 closing prices of the time frame. To do this, click on the cog at MA , here’s what you should see:

Length 9 and source are the close courses

Step 2: Choose the right time frame

An essential point in the 9 Moving Average trading strategy is the time frame. The higher the time frame, the more the price “respects” the moving average. A 9MA on the minute does not have as much weight as a 9MA of an hour or a day. In our trading strategy we usually choose the day. Now select your time frame:

Select a time frame of 1 day

Step 3: Entry with the 9 moving average trading strategy

If you are betting on rising prices, look for a close entry of a price above the moving average. The point of crossing is usually a change in trend. Set the stop loss tightly below the 9MA, here is an example.

Tight stop loss below the 9MA

We usually wait for a confirmation by a second green candle above the 9MA.

Step 4: Take Profit

In the best case, simply drag the stop loss along below the 9MA, we sketch it out for you right below in an example:

Retighten the stop loss daily below the 9MA

With this strategy, you may not be able to trade as frequently, but you can start with high positions according to your risk and even increase a position size in profit if desired.

Frequently asked questions and answers about the 9 moving average trading strategy

What is the Moving Average?

A MA is a “moving average” and is used in chart analysis. While indicators derived from the moving average, such as the EMA ( exponential moving average), apply a weighting to the price data used to calculate the average, the same are not weighted in the case of the simple moving average.

Which moving average should I use?

Which moving average you choose depends primarily on your individual time frame for your trade. In this strategy we recommend and use the 9 moving average on a daily chart.

Important risk notice:
This service or the provider advertised here is only suitable for professional traders. Users without sufficient experience usually suffer a total losswhile trading here. Trading with leverage is highly risky and leads to poor risk management. Use this service only as a professional trader with sufficient experience in trading and leverage.

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