Technical Analysis of MA Indicator

Trend Identification

The MA technical indicator can be used as an technical indicator for generating signals. A buy or a sell trade signal is generated when price either moves above or below the MA technical indicator, respectively.

If the Moving Average is moving upwards in diagonal manner then the general market trend is up-wards.

If the on the other hand the Moving Average is heading downwards in diagonal manner then the general market trend is downwards.

Upward Trend/Bullish Trend

If the Moving Average is moving up, then the trend is up-ward and the signal generated is a buy/bullish gold trade signal.

As long as the gold price is above the moving average then the trend will remain as an upwards trend. The MA will act as a 'support zone' & price action of gold chart candlesticks should not close below the MA.

Buy Trading Signal

When the gold price moves above the Moving Average and closes above the MA moving average, a buy trade signal is generated.

Traders, who want to confirm the trade signal before implementing it, should wait until the Moving Average line turns & starts to move in an upward trend direction. It's always best to wait for the confirmation signal so as to minimize chances of a whipsaw.

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Downwards Trend/Bearish Market

If the Moving Average is moving down, then the trend is downward and the signal generated is a sell/short trade signal.

As long as the gold price is below the MA then the trend will remain as a downward bearish trend. The MA will act as a "resistance zone" and price action of candlesticks should not close above the MA Moving Average.

Sell Trading Signal

When the gold price moves below the Moving Average and closes below the MA moving average, a sell trade signal is generated.

Traders who want to confirm the signal should wait til the MA line turns and starts to move in a downward direction. This will reduce the chance of trading a fake out.

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XAUUSD Trading Range Market signals

Range Gold Market signals can also be identified using the MA Indicator.

Moving Average Crossover Strategy Method Strategy

Moving average cross-over trading strategy is also another signal generation strategy that is more favored by traders in-comparison to the above signal generation strategy method. Moving average cross-over strategy is also the simplest form of a system widely used by online gold traders. This Moving Average crossover method is combined with other technical indicators to develop more complex systems and gold strategies.

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