Moving Average Whipsaws Fake Outs in Ranging Sideways Market
Best Strategy for Moving Averages Indicator
The trading moving average is a helpful chart indicator to trade with when a market trend has formed. However the MA technical indicator is prone to fake-outs when the price is trading in rangebound sideways market.
The MA is prone to whipsaw fake-outs during a ranging market because the price is volatile and keeps moving around the average, causing the MA indicator to give trading signals indicating upward trend and then quickly changing to give sell signals.
It's for this reason that the Moving Average indicator shouldn't be used to trade gold in a range based market.
Range-Bound Market and Whipsaws - How to Trade XAU/USD in a Range Market
This is why it's best to combine this trading moving average indicator with other indicators when generating gold signals to trade with.
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