Moving Average Support and Resistance Levels

Moving Averages can be used as points of support & 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 trend & starts to retrace, then most traders might wait to buy at a better forex price when the price hits a support level. Traders will sometimes use the Moving Average to determine the support level.

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

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

Buy Forex Signal - How to Trade with Moving Average Strategy

Sell Forex Signal

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

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

A stoploss should be set just above the forex moving average indicator. Ideally it should be set a few pips above the previous high.

Sell 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 & vice versa.

This happens when the fundamentals of a trend change and consequently the direction of a currency pair. The direction change is reflected by the moving average technical indicator, the direction is confirmed when resistance zone turns into support area or vice versa (when support level turns into resistance level)

Resistance Level turns Support Level - Moving Average Trading Strategy Examples