Moving Average Support and Resistance Levels
Moving Averages can be used as points of support and resistance on forex charts.
When forex price reaches the moving average, the Moving Average level can act as a point of support or resistance for the forex price.
Buy Forex Signal
If price is on an upward forex trend and starts to retrace, then most forex traders might wait to buy at a better forex price when the price hits a support level. Forex Traders will sometimes use the Moving Average to determine the support level.
A buy forex trading signal is generated when price hits the Moving Average, turns and starts moving in the upward forex trend direction. The forex trading signal is confirmed when forex price closes above the MA. Because many forex traders use the moving averages to generate forex trading signals, price will normally react to these levels.
A stop loss should be set just below the Moving Average forex Indicator. Ideally it should be set a few pips below the previous low.
Buy Forex Trading Signal - How to Trade Forex with Moving Average Strategy
Sell Forex Signal
If the forex price is on a downward forex trend and starts to retrace, then most forex traders might wait to sell at a better price when the forex price hits a resistance level. Forex Traders will sometimes use the Moving Average to determine the resistance level.
A sell forex trading signal is generated when price hits the Moving Average, turns and starts moving in the downward forex trend direction. The forex trading signal is confirmed when price closes below the MA. Because many forex traders use the moving averages to generate forex trading signals, price will normally react to these levels.
A stop loss should be set just above the forex moving average indicator. Ideally it should be set a few pips above the previous high.
Sell Forex Trading Signal - How to Trade Forex with Moving Average Strategy
Resistance Level turns Support Level
In Forex Trading - When a resistance level is broken it turns into support and vice versa.
This happens when the fundamentals of a forex trend change and consequently the direction of a currency pair. The direction change is reflected by the moving average forex indicator, the direction is confirmed when the resistance turns into support or vice versa (when support turns into resistance)
Resistance Level turns Support Level - Moving Average Forex Trading Strategy Example
