Trade Stock Indices

Moving averages whipsaws in range markets: Trade stock indices in ranges

Moving Averages (MA) are useful indicators when analyzing trends in indices. However, in range-bound markets, MAs are prone to providing false signals or "whipsaws."

In sideway markets, MA gives false signals. Prices swing around the average. This whips the indicator from buy to sell fast.

For this particular rationale, the Moving Average (MA) indicator is ill-suited for executing trades on Stock Indexes when the market is consolidating within a defined range.

Moving Average Whipsaws in Ranging Index Markets - Analysis of Ranging Market Behavior

Trading Stock Indices During Periods of Sideways Movement and Volatility (Whipsaws) - Range-Bound Market Strategies

So, it's best to use this Index moving average sign with others when making signals to trade Indices with.

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