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 whipsaws when the price is trading in range market.

The Moving Average is prone to whipsaws during a ranging market because the price is volatile and keeps moving around the average, causing the trading moving average indicator to give signals indicating upward indices trend and 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.