How to use 200 Simple MA

We can use 200 MA as a market direction.

The rule is very simple

1. if current price is above 200 simple MA, it's mean the price is trending up

2. if current price is below 200 simple MA, it's mean the price is trending down

Let see some example:

As you can see from the chart above, 200 simple MA line divide the price into two zone, above and below the line. When the current price is below the line, it will be easier to get lower. So the next rule when using 200 simple MA is:

3. open just long position (buy) if the current price is above 200 simple MA

4. open just short position (sell) if the current price is below 200 simple MA

200 simple MA cannot tell you when to open a position, it just tell you where the current price heading and what kind position you should open. To answer this question you'll need to learn how to draw support and resistance and learn price pattern (candle stick pattern) to complete your set up.