Moving Average Support and Resistance Levels
Moving Averages can be used as points of support & resistance on stock indices charts.
When stock indices trading price reaches the moving average, the Moving Average level can act as a point of support or resistance for the stock indices trading price.
Buy Trading Signal
If stock indices trading price is on an upward indices trend and starts to retrace, then most traders might wait to buy at a better stock indices trading price when the stock indices trading price hits a support level. Traders will sometimes use the Moving Average to determine the support level.
A buy stock indices signal is generated when stock indices trading price hits the Moving Average, turns and starts moving in the upward trend direction. The stock indices signal is confirmed when stock indices trading price closes above the MA. Because many traders use the moving averages to generate stock indices trading signals, stock indices trading price will normally react to these levels.
A stoploss should be set just below the Moving Average indices trading Indicator. Ideally it should be set a few pips below the previous low.
How to Trade Indices with Moving Average Strategy
Sell Trading Signal
If the stock indices trading price is on a downward indices trend and starts to retrace, then most traders might wait to sell at a better stock indices trading price when the stock indices trading price hits a resistance level. Traders will sometimes use the Moving Average to determine the resistance level.
A sell stock indices signal is generated when stock indices trading price hits the Moving Average, turns and starts moving in the downward indices trend direction. The stock indices signal is confirmed when stock indices trading price closes below the MA. Because many traders use the moving averages to generate stock indices trading signals, stock indices trading price will normally react to these levels.
A stoploss should be set just above the indices moving average indicator. Ideally it should be set a few pips above the previous high.
Sell Indices Trading Signal - How to Trade Indices with Moving Average Strategy
Resistance Level turns Support Level
In Indices Trading - When a resistance level is broken it turns into support & vice versa.
This happens when the fundamentals of a indices trend change and consequently the direction of indices. Direction change is reflected by the moving average stock indices technical indicator, the direction is confirmed when resistance zone turns into support area or vice versa (when support level turns into resistance level)
Resistance Level turns Support Level - Moving Average Indices Trading Strategy Examples
