Index Trend Indicators Moving Average Technical Analysis

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

These 2 moving averages then will be used to determine the direction of the market price & also the force of the trend.

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

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

The 2 moving averages will also be used to determine the momentum 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(MAs) cross-over each other - then it means that the trend might change & a stock index trader should get ready to open or close a trade depending on the direction of the price that the stock indices 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 Cross-over Signal Trading Method

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

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

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Index Trend Indicators Moving Average Technical Analysis