Technical Analysis of MA Indicator

Trend Identification

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

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

If the on the other hand the Moving Average is moving downwards in diagonal kind of manner then the general market trend is downward.

Upward Trend/Bullish Trend

If the Moving Average is moving up, then the trend is up-ward and the signal derived and 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 shouldn't close below the MA.

Buy Signal

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

Traders, that want to confirm the trade signal before implementing it, should wait until the Moving Average line turns and starts and begins 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 derived and 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 Signal

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

Traders that want to confirm the signal should wait til the MA line turns and starts and begins to move in a downwards 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 Moving Average Indicator.

Moving Average Cross-over Strategy Strategy

Moving Average crossover strategy is also another signal generation strategy that is more favored by traders in-comparison to the above signal generation strategy method. Moving Average(MA) 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 indicators to develop more complex systems and gold strategies.

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