Analysis of Linear Weighted MA Technical Indicator

XAU/USD Trend Identification

The gold MA indicator can be used as an technical indicator for generating trade signals. A buy or sell signal gets derived and 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 sort of manner then general and overall trend is upwards.

If on other hand the Linear Weighted Moving Average is moving downwards in diagonal sort of manner then general and overall trend is downward.

LWMA Bullish XAUUSD Trend

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

As long as the price is above the MA indicator - then the market trend will remain as an upwards 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 crosses above the Linear Weighted MA and closes above the MA indicator - a buy signal gets generated.

XAU USD Traders, who want to confirm the signal before trading, should wait until Linear Weighted Moving Average line turns & starts and begins to move in an upwards trend direction. It is 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 trading signal derived and generated is a sell signal.

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

Sell Signal

When the price crosses below the Linear Weighted MA & closes below the moving average - a sell signal gets generated.

Those that 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 Cross-over Method Strategy

The Linear Weighted Moving Average crossover trading strategy also is another signal generation strategy which is popular among traders compared and analyzed to the above 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 strategy method/technique is combined together with other trading indicators to form more complex strategies.

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