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Technical Analysis of Moving Average Forex Indicator


Forex Trend Identification

The forex moving average indicator can be used as an indicator for generating forex trading signals. A buy or sell Forex signal is generated when price either moves above or below the moving average, respectively.

 

If the MA is heading upward in diagonal manner then the general forex market trend is upwards.

 

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

 

Upward Forex Trend/Bullish Trend

If the MA is moving up, then the forex trend is upwards and the signal generated is a buy/bullish forex trading signal.

 

As long as the forex price is above the moving average then the Forex trend will remain as an upward trend. The moving average will act as a “support level” and price action of the forex chart candlesticks should not close below the MA.

 

Buy Forex Signal

When the forex price moves above the MA and closes above the moving average, a buy forex trading signal is generated.

 

Forex Traders, who want to confirm the forex trade signal before implementing it, should wait until the MA line turns and starts to move in an upward forex trend direction. It is always best to wait for the confirmation forex trading signal so as to reduce chances of a whipsaw.

Upward Forex Trend - How to Day Trade Forex: A Detailed Guide to Day Trading Strategies

Upward Forex Trend - How to Day Trade Forex: A Detailed Guide to Day Trading Strategies


Downward Forex Trend/Bearish Market

If the MA is moving down, then the Forex trend is downwards and the signal generated is a sell/short forex trading signal.

 

As long as the forex price is below the MA then the forex trend will remain as a downward bearish Forex trend. The MA will act as a “resistance level” and price action of candlesticks should not close above the MA.

 

 

Sell Forex Signal

When the forex price moves below the MA and closes below the moving average, a sell forex trading signal is generated.

 

Forex traders who want to confirm the forex signal should wait until the MA line turns and starts to move in a downward direction. This will reduce the chance of trading a whipsaw.

 

Downward Forex Trend - How to Day Trade Forex: A Detailed Guide to Day Trading Strategie

Downward Forex Trend - How to Day Trade Forex: A Detailed Guide to Day Trading Strategies

 

Forex Range Market signals

Range Forex Market signals can also be identified using the Moving Average Indicator.

 

Moving Average Crossover Method Forex Trading Strategy

The moving average crossover method is also another Forex trading signal generation strategy that is more favored by forex traders compared to the above forex trading signal generation strategy method. Moving average crossover forex trading strategy is also the simplest form of a forex trading system widely used by online forex traders. This MA crossover method is combined with other technical indicators to form more complex forex trading systems and forex trading strategies.

 

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