Technical Analysis of MA Indicator
Trend Identification
The trading Moving Average indicator can be used as an technical indicator for generating signals. A buy or a sell signal is generated when the price either moves above or below the Moving Average indicator, respectively.
If the Moving Average is moving upwards in diagonal manner then the general trend is up-wards.
If the on the other hand the Moving Average is heading downwards in diagonal manner then the general trend is downward.
Bullish Trend
If the Moving Average is moving up, then the trend is up-ward and the signal generated is a buy signal.
As long as the price is above the MA - then the trend will remain as an up-wards trend. The MA will act as a 'support level' and price action of candlesticks should not close below the Moving Average Indicator.
Buy Trade Signal
When the price moves above the Moving Average and closes above the moving average indicator - a buy signal is generated.
Traders, who want to confirm the trade signal before trading, should wait until the Moving Average line turns & starts to move in an up-ward trend direction. It's always best to wait for the confirmation signal so as to minimize chances of a whipsaw.
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Bearish Trend
If the Moving Average is moving down, then the market trend is downward and the signal generated is a sell signal.
As long as the price is below the MA then the trend will remain as downwards bearish trend. The Moving Average will act as a "resistance level" and price action of candles shouldn't close above the MA.
Sell Trading Signal
When the price moves below the Moving Average and closes below the moving average - a sell signal is generated.
Traders who want to confirm the signal should wait until the Moving Average line turns and starts to move in a downwards direction. This will reduce the chance of trading a fake out.
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Range Gold Market signals
Range Trading Market signals also can be identified using the Moving Average Indicator.
MA Crossover Strategy Method Strategy
The moving average crossover strategy is also another signal generation strategy which's popular among traders compared to the above signal generation strategy. Moving average cross-over strategy is also the simplest form of a system widely used by traders. This Moving Average crossover strategy is combined with other technical indicators to form more complex gold strategies.
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