Moving Average Whipsaws in Range Market
Range Markets Systems
The moving average is a useful trade technical chart technical indicator to trade with when a price trend has formed. However the moving average indicator is prone to generating whipsaws also known as fake out signals when the price is trading in range market.
The Moving Average indicator is prone to fake outs during a ranging market because the price is volatile & keeps moving around the average, causing the moving average indicator to give signals indicating upwards trend & then quickly changing to give sell signals - thus generating many whipsaw signals.
It's for this reason that the MA indicator shouldn't be used to trade xauusd in a range based market.
Ranging Market and Whipsaws in Gold Moving Average - How to Trade XAUUSD on a Range Market
This is why it's best to combine this moving average indicator with other indicators when generating signals to trade with.
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