Analysis of Linear Weighted MA Technical Indicator

XAUUSD Trend Identification

The gold MA indicator can be used as an indicator for generating trade signals. A buy or sell signal gets generated when price either moves above or below the Linear Weighted Moving Average moving average, respectively.

If Linear Weighted Moving Average is heading upward in diagonal manner then general trend is upward.

If on other hand the Linear Weighted Moving Average is moving downwards in diagonal manner then general trend is downwards.

LWMA Bullish XAUUSD Trend

If Linear Weighted Moving Average is moving up, then the trend is upwards and the trading signal generated is a buy xauusd trade signal.

As long as the price is above the MA indicator - then the market trend will remain as an upward trend. The MA will act as a "support area" and price action should not close below the Linear Weighted Moving Average Indicator.

Buy Gold Signal

When the price moves above the Linear Weighted Moving Average and closes above the moving average indicator - a buy signal gets generated.

XAUUSD Traders, who want to confirm the signal before trading, should wait until Linear Weighted Moving Average line turns & starts to move in an upward trend direction. It's always best to wait for the confirmation signal to reduce odds of a gold whipsaw fakeout.

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Bearish Trend

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

As long as the price is below the Linear Weighted Moving Average then the trend will remain as down ward trend. The Linear Weighted Moving Average will act as a "resistance zone" and price action shouldn't close above the LWMA.

Sell Trading Signal

When the price moves below the Linear Weighted Moving Average and closes below the moving average - a sell signal gets generated.

Those who want to confirm the signal should wait until Linear Weighted MA line turns and starts to move in a downwards direction. This will minimize the chance of trading a xauusd fake out.

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Range Gold signals

Range Gold trading signals can also be identified using the Linear Weighted Moving Average LWMA Indicator.

LWMA Crossover Method Strategy

The Linear Weighted Moving Average crossover trading strategy also is another signal generation strategy which is popular among traders compared to the above trading signal generation method. Moving average cross-over strategy is also the simplest form of a trading system vastly used by traders. This Linear Weighted Moving Average cross-over trading strategy method is combined with other trading indicators to form more complex strategies.

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