Indices Trend Indicators Moving Average Indicator Technical Analysis

Moving average technical indicator can be used to determine the momentum of a market move - momentum of a trend. In trading analysis there is method of using the moving average indicator just to do this. This method of trading is known as the moving average cross over signal. This moving average crossover signal method involves using two moving averages - one moving average that has a higher price period and another moving average that has a lower price period. For example a moving average indicator crossover system can have the 5 day moving average & the 7 day moving average.

These two moving averages will then be used to determine the direction of the market & also the momentum of the trend.

Upward Trend - when both moving averages are heading upwards the trend is upwards - upward trend direction

Downward Trend - when both moving averages are moving down the market trend is downwards - downward trend direction

The two moving averages will also be used to determine the strength of current market trend direction. As long as the two moving averages keep moving in the same direction then current trend direction is likely to continue.

If the two moving averages crossover each other - then it means that the trend might change & a stock index trader should get ready to open or to close a trade depending on the direction of the market that the trader is trading.

A trader can learn more about how to use this moving average crossover signal and get an example of how this Moving Average crossover signal system is used to generate trade signals in the strategy tutorial: Moving Average Crossover Signal Trading Method

Beginner traders can also add this strategy method in their stock system & combine this moving average crossover method with other indicators to create a system. A trader will then write the rules of their stock system & use these written rules to know when to open a buy trade or a sell trade & when to close the trade. To learn how to come up with a system - traders should go to the strategies section of this web site and read the systems guides.

Indices Trend Indicators Moving Average Indicator Technical Analysis - Trend Technical Indicator MetaTrader 4 Moving Average Indicator

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Indices Trend Indicators Moving Average Indicator Technical Analysis