Indices MA Moving Average Support & Resistance Levels Trade Strategy

Moving Averages can be used as points of support & resistance on Indices trade charts.

When Indices price reaches the moving average, Moving Average level can act as a point of support or resistance for the Indices price.

Buy Signal

If price is on an upward trend and starts to retrace, then most Stock traders might wait to buy at a better price when the price hits a support level. Traders will sometimes use the Moving Average to determine the support level.

A buy Stock Indices signal is generated when price hits the Moving Average, turns & starts moving in the upward trend direction. The signal is confirmed when price closes above the MA. Because many Traders use the moving averages to generate signals, price will normally react to these levels.

A stop loss should be set just below the Moving Average Indicator. Ideally it should be set a few pips below the previous low.

Buy Signal - How to Trade with MA Moving Average Strategy

Sell Signal

If the Indices price is on a downward trend and starts to retrace, then most Stock traders might wait to sell at a better price when the Indices price hits a resistance level. Traders will sometimes use the Moving Average to determine the resistance level.

A sell Indices signal is generated when price hits the Moving Average, turns & starts moving in the downward trend direction. The signal is confirmed when price closes below the MA. Because many Traders use the moving averages to generate signals, price will normally react to these levels.

A stop loss should be set just above the Indices moving average indicator. Ideally it should be set a few pips above the previous high.

Sell Signal - How to Trade with MA Moving Average Strategy

Resistance Level turns Support Level

In Indices - When a resistance level is broken it turns into support & vice versa.

This happens when the fundamentals of a trend change and consequently the direction of a trade chart. The direction change is reflected by the moving average Indices indicator, direction is confirmed when the resistance turns into support or vice versa (when support turns into resistance)

Resistance Level turns Support Level - MA Moving Average Indices Trade Strategy Example