MA Whipsaws in Range Markets Strategies
Range Markets Strategies
The indices trading moving average is a useful chart indicator to trade with when a indices trend has formed. However the moving average indicator is prone to fake outs when price is trading in ranging market.
The MA is prone to whipsaw fakeouts during a ranging market because the market price is volatile and keeps moving around the average, causing the trading moving average indicator to give signals indicating upward indices trend & then quickly changing to give sell stock signals.
It's for this reason that the Moving average indicator should not be used to trade indices in a range based market.
Ranging Market and Whipsaws - How to Trade Indices in a Range Market
This is why it is best to combine this trading moving average indicator with other indicators when generating signals to trade indices with.
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