One is to trade in the direction of moving average crosses where a shorter term moving average (ma) cross a longer term one.
Unfortunately this leaves a trader open to whipsaws the majority of his trading career as most markets are not trending.
An easier and more profitable use of moving averages is to use them to enter into a trending market where one exists.
Its usually allows you to enter on a pullback (combine it with a relatively low or high $TICK for example) and to trade with tighter stops without them being raided continuously.
I will post a couple of charts here as examples. Moving averages allow you to take advantage of trends.
You can also reference my article on moving average fans for more information.
Above the price of the YM futures contract follows the 20 sma (yellow line)on a 1 minute chart - down to the lower bollinger band. Below it follows the 50 sma down on the 1 minute chart. Both examples are from today, and most days where a strong trend develops intraday the moving averages can be used routinely and successfully in this fashion.
