Technical Analysis of Moving Average Indicator
Indices Trend Identification
The stock indices moving average indicator can be used as an technical indicator for generating stock indices signals. A buy or sell signal is generated when price either moves above or below the moving average technical indicator, respectively.
If the MA is heading upward in diagonal manner then general stock indices market stock indices trend is upwards.
If the on the other hand the MA is heading downwards in diagonal manner then general stock indices market stock indices trend is downward.
Upward Stock Indices Trend/Bullish Trend
If the MA is moving up, then the trend is upward & the signal generated is a buy/bullish stock index trade signal.
As long as the stock index price is above the moving average then the stock indices trend will remain as an upward trend. The moving average will act as a 'support level' & stock index price action of the stock index chart candlesticks should not close below the Moving Average.
Buy Stock Indices Signal
When the stock index price moves above the MA and closes above the moving average, a buy stock index trade signal is generated.
Stock Indices Traders, who want to confirm the stock indices trade signal before implementing it, should wait until the MA line turns and starts to move in an upward stock indices trend direction. It is always best to wait for the confirmation stock indices signal so as to reduce chances of a stock indices whipsaw.
Upwards Stock Indices Trend - How to Day Trade Stock Indices: A Detailed Guide to Day Trade Strategies
Downwards Stock Indices Trend/Bearish Market
If the MA is moving down, then the trend is downwards and the signal generated is a sell/short stock index trade signal.
As long as the stock index price is below the MA then the stock indices trend will remain as a downward bearish Indices trend. The MA will act as a "resistance level" and stock index price action of candlesticks should not close above the Moving Average.
Sell Indices Signal
When the stock index price moves below the MA and closes below the moving average, a sell stock index trade signal is generated.
Traders who want to confirm the stock indices signal should wait until the MA line turns and starts to move in a downward direction. This will reduce the chance of trading a stock indices whipsaw.
Downwards Stock Indices Trend - How to Day Trade Stock Indices: A Detailed Guide to Day Trade Strategies
Stock Indices Trading Range Market trading signals
Range Stock Index Market signals can also be identified using the Moving Average Stock Index Indicator.
Moving Average Crossover Method Stock Indices Strategy
The moving average crossover method is also another stock index trading signal generation strategy that is more favored by traders compared to the above stock indices signal generation strategy method. Moving average crossover stock indices strategy is also the simplest form of a stock indices system widely used by online stock index traders. This MA crossover method is combined with other technical indicators to form more complex stock indices systems and stock index trading strategies.
