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Moving Average Whipsaws Fake Outs in Ranging Sideways Market

Best Strategy for Moving Averages Indicator

The moving average is a beneficial charting aid for trading once a discernible market trend has emerged. Nonetheless, the MA technical tool is susceptible to false signals when prices are oscillating within a sideways, range-bound market.

During a ranging market, moving averages (MA) tend to produce false signals, known as whipsaws, due to price volatility. The price fluctuates around the average, sometimes indicating a bullish trend before quickly switching to sell signals.

For this precise reason, it is advisable not to use the Moving Average indicator when attempting to trade gold within a market environment that is consolidating sideways.

MA Whipsaws in Ranging Markets Strategies - Moving Average Indicator

Range-Bound Market and Whipsaws - How to Trade XAU/USD in a Range Market

That's why it's good to use this trading average indicator with other indicators to get better gold trading signals.

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