MA Support & Resistance Zones
MAs can be used as points of support & resistance on charts.
When price reaches the moving average, the Moving Average level can act as a point of support or resistance for the price.
Buy Trading Signal
If price is on an upward trend and starts to retrace, then most traders might wait to buy at a better trading price when the price hits a support level. Traders will sometimes use the Moving Average to determine the support zone.
A buy signal gets generated when price hits the Moving Average, turns and starts heading in the upward trend direction. The signal is confirmed when the price closes above the Moving Average. Because many traders use the Moving Averages to generate trade signals, trading price will normally react to these zones.
A stoploss should be set just below the Moving Average indices trading Indicator. Ideally it should be set a couple of pips below the previous low.
How to Trade Indices with MA Strategy Method
Sell Trading Signal
If the price is on a downwards trend & starts to retrace, then most traders might wait to sell at a better trading price when the price hits a resistance level. Traders will sometimes use the MA to determine the resistance area.
A sell signal gets generated when price hits the Moving Average, turns & starts heading in the downwards trend direction. The signal is confirmed when price closes below the Moving Average. Because many traders use the Moving Averages to generate trade signals, price will normally react to these zones.
A stoploss order should be set just above the MA trading indicator. Ideally it should be set a couple of pips above the previous high.
Sell Indices Trading Signal - How to Trade Indices with MA Strategy Method
Resistance Zone turns Support Area
In Indices Trading - When a resistance level is broken it turns into support & vice versa.
This happens when the fundamentals of a trend change and consequently the direction of indices. Direction change is reflected by the moving average technical indicator, the direction is confirmed when resistance level turns in to support zone or vice versa (when support zone turns into resistance area)
Resistance Level turns Support Level - Moving Average Indices Trading Strategy Example
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