Stock Index MA Moving Average Support and Resistance Levels Trade Strategy

Moving Averages can be used as points of support and resistance on Indices trade charts.

When Indices price reaches the moving average, MA level can act as a point of support or resistance for the Indices price.

Buy Signal

If price is on an upwards Indices trend & starts to retrace, then most Stock Indices traders might wait to buy at a better Stock Indices price when the price hits a support level. Traders will sometimes use the MA to determine the support level.

A buy Stock Index trading signal is generated when price hits the MA, turns & starts moving in the upwards Indices trend direction. The Indices trading signal is confirmed when Indices price closes above the MA. Because many Stock Traders use the moving averages to generate trading signals, price will normally react to these levels.

A stop loss should be set just below the MA Indicator. Ideally it should be set a few pips below the previous low.

Buy Signal - How to Trade Indices with Moving Average Strategy

Sell Signal

If the Indices price is on a downwards Indices trend & starts to retrace, then most Stock Indices traders might wait to sell at a better price when the Indices price hits a resistance level. Traders will sometimes use the MA to determine the resistance level.

A sell Indices trading signal is generated when price hits the MA, turns & starts moving in the downwards Indices trend direction. The Indices trading signal is confirmed when price closes below the MA. Because many Stock Traders use the moving averages to generate trading signals, price will normally react to these levels.

A stop loss should be set just above the Indices moving average indicator. Ideally it should be set a few pips above the previous high.

Sell Signal - How Do I Trade Indices with Moving Average Strategy

Resistance Level turns Support Level

In Indices Trading - When a resistance level is broken it turns into support and vice versa.

This happens when the fundamentals of a Indices trend change & consequently the direction of a index chart. The direction change is reflected by the moving average Indices indicator, direction is confirmed when the resistance turns into support or vice versa (when support turns into resistance)

Resistance Level turns Support Level - MA Moving Average Indices Trade Strategy Example