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