MA Support and Resistance Areas
Moving Averages can be used as points of support & resistance on charts.
When price reaches the MA moving average, the Moving Average level can act as a point of support or resistance for the price.
Buy Trading Signal
If price is on an upwards trend and starts to retrace, then most traders might wait to buy at a better price when the price touches a support level. Traders will sometimes use the MA to determine the support level.
A buy signal is generated when price hits the MA, turns and starts heading in the upwards trend direction. The signal is confirmed when price closes above the Moving Average. Because many traders use the moving averages MAs to generate trading signals, price will normally react to these levels.
A stoploss should be set just below the Moving Average Indicator. Ideally it should be set a couple of pips below the previous low.
Buy Signal - How Do I Trade with Moving Average Strategy Method
Sell Trading Signal
If the price is on a downwards trend and starts to retrace, then most traders might wait to sell at a better price when price hits a resistance zone. Traders will sometimes use the Moving Average to determine the resistance zone.
A sell signal is generated when the price touches the MA, turns and starts moving in the downward trend direction. The signal is confirmed when price closes below the Moving Average. Because many traders use the moving averages MAs to generate trading signals, price will normally react to these levels.
A stoploss order should be set just above the moving average MA indicator. Ideally it should be set a couple of pips above the previous high.
Sell Signal - How Do I Trade with Moving Average Strategy Method
Resistance Area turns Support Level
In Gold - When a resistance zone is broken it turns into support & vice versa.
This happens when the fundamentals of a trend change and consequently the direction of gold. The direction change is reflected by the moving average MA indicator, the direction is confirmed when the resistance zone turns into support level or vice versa (when support level turns into resistance area)
Resistance Level turns Support Level - Moving Average Strategy Examples
Learn More Tutorials & Topics:
- How Do You Trade Gold Price Retrace Gold?
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- How Do You Trade Triple Exponential Average Technical Indicator?
- How Do You Read MetaTrader 5 App & Download MT5 App?
- Gold Support and Resistance Levels Trading Analysis
