Technical Analysis of Moving Average Indicator
Stock Index Trend Identification
The Indices moving average indicator can be used as an indicator for generating trading signals. A buy or sell Indices signal is generated when price either moves above or below the moving average, respectively.
If the MA is heading upward in diagonal manner then the general Indices market trend is upward.
If the on the other hand the MA is moving downwards in diagonal manner then the general Indices market trend is downward.
Upward Indices Trend/Bullish Trend
If the MA is moving up, then the Indices trend is upward & the signal generated is a buy/bullish Stock Indices trading signal.
As long as the Indices price is above the moving average then the Indices trend will remain as an upwards trend. The moving average will act as a "support level" & price action of the Indices trade chart candlesticks should not close below the MA.
Buy Signal
When the Indices price moves above the MA & closes above the moving average, a buy Stock Index trading signal is generated.
Stock Index Traders, who want to confirm the Indices trade signal before implementing it, should wait until the MA line turns & starts to move in an upwards Indices trend direction. It is always best to wait for the confirmation Indices trading signal so that as to reduce chances of a whipsaw.
Upward Indices Trend - How Do I Day Trade Stock Indices: A Detailed Course to Day Trade Strategies
Downward Indices Trend/Bearish Market
If the MA is moving down, then the Indices trend is downward & the signal generated is a sell/short Stock Indices trading signal.
As long as the Indices price is below the MA then the Indices trend will remain as a downwards bearish Stock Indices trend. The MA will act as a "resistance level" & price action of candlesticks should not close above the MA.
Sell Signal
When the Indices price moves below the MA & closes below the moving average, a sell Indices trading signal is generated.
Stock Index traders who want to confirm the Indices signal should wait until the MA line turns & starts to move in a downwards direction. This will reduce the chance of trading a whipsaw.
Downward Indices Trend - How Do I Day Trade Stock Indices: A Detailed Course to Day Trade Strategies
Stock Index Range Market signals
Range Indices Market signals can also be identified using the MA Indicator.
Moving Average Crossover Method Indices Trade Strategy
The moving average crossover method is also another Stock Indices trading signal generation strategy that is more favored by traders compared to the above Indices trading signal generation strategy method. Moving average crossover Stock Indices trading strategy is also the simplest form of a Indices trading system widely used by online Indices traders. This MA crossover method is combined with other technical indicators to form more complex Stock Index trading systems & Indices trading strategies.
