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