Technical Analysis of MA Indicator

Forex Trend Identification

The forex moving average indicator can be used as an technical indicator for generating signals. A buy or sell Forex signal is generated when price either moves above or below moving average, respectively.

If the MA is heading upward in diagonal manner then general market trend is upward.

If the on the other hand the MA is heading downwards in diagonal manner then general market trend is downward.

Upwards Forex Trend/Bullish Trend

If the MA is moving up, then the trend is upwards and the signal generated is a buy/bullish signal.

As long as the price is above the moving average then the trend will remain as an up-wards trend. The moving average will act as a 'support level' & price action of the chart candlesticks should not close below the MA.

Buy Signal

When the price moves above the MA and closes above the moving average, a buy signal is generated.

Traders, who want to confirm the trade signal before implementing it, should wait until the MA line turns and starts to move in an upward trend direction. It's always best to wait for the confirmation signal so as to reduce chances of a whipsaw.

Up-wards Forex Trend - How to Day Trade Forex: A Detailed Guide to Day Trading Methods

Downwards Forex Trend/Bearish Market

If the MA is moving down, then the trend is downwards and the signal generated is a sell/short signal.

As long as the price is below the MA then the trend will remain as a downward bearish Forex trend. The MA will act as a "resistance level" and price action of candlesticks should not close above the MA.

Sell Signal

When the price moves below the MA and closes below the moving average, a sell signal is generated.

traders who want to confirm the signal should wait until the MA line turns and starts to move in a downward direction. This will reduce the chance of trading a whipsaw.

Downwards Forex Trend - How to Day Trade Forex: A Detailed Guide to Day Trading Methods

Forex Range Market signals

Range Forex Market signals can also be identified using the MA Indicator.

MA Crossover Strategy Method Trading Strategy

The MA cross-over method is also another signal generation strategy that is more favored by traders compared to the above signal generation strategy method. Moving average crossover strategy is also the simplest form of a system widely used by online traders. This MA crossover method is combined with other technical indicators to form more complex systems & trading strategies.