Stock Index MA Moving Average Support & Resistance Levels Trade Strategy

Moving Averages(MAs) can be used as points of support and resistance on Indices trading charts.

When Index price reaches the moving average, MA level can act as a point of support/resistance for the price.

Buy Signal

If the price is on an upward market trend & begins to retrace, then most Index traders might wait to open buy at better price when the price hits a support level. Traders will sometimes use the MA Moving Average to figure out the support level.

A buy signal gets generated/derived when price hits the MA, turns & starts moving in the upwards trend direction. The trading signal is confirmed when price closes above the MA. Because many Stock Index Traders use the moving averages Moving Averages to generate signals, price will in general react to these levels.

A stoploss order should be placed just below the MA(Moving Average) Indicator. Ideally it should be placed a few pips below the previous low.

Buy Trading Signal - How Do You Trade with Moving Average Strategy

Sell Signal

If the price is on a downwards trend & begins to retrace, then most Index traders might wait to open sell at better price when the price hits a resistance level. Traders will sometimes use the MA Moving Average to figure out the resistance level.

A sell trading signal gets generated/derived when price hits the MA, turns & starts moving in the downward trend direction. The signal is confirmed when price closes below the MA. Because many Indices Traders use the moving averages MAs to generate trading signals, price generally will react to these areas.

A stoploss order should be placed just above the Index moving average indicator. Ideally it should be placed a few pips above the previous high.

Sell Signal - How Do You Trade with Moving Average Strategy

Resistance Level turns Support Level

In Indices - When a resistance level is broken it turns into support & vice versa.

This happens when the fundamentals of a market trend change & consequently the direction of a chart. The direction change is reflected by the moving average indicator, direction is confirmed when the resistance level turns into support or vice versa (when support turns in to resistance)

Index MA Moving Average Support Resistance Levels Strategies

Resistance Level turns Support Level - MA Moving Average System Example

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Trade Stock Indices

Stock Index MA Moving Average Support & Resistance Levels Trade Strategy

Buy Signal

Sell Signal

Resistance Level turns Support Level