Moving Average Support and Resistance Levels

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

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

Buy Signal

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

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

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

Buy Signal - How to Trade CFD with Moving Average Method

Sell Signal

If the price is on a downward cfd trend & starts to retrace, then most traders might wait to sell at a better price when the price hits a resistance level. CFD 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 cfd trend direction. The cfd signal is confirmed when price closes below the MA. Because many cfd traders use the moving averages to generate cfd signals, cfds price will normally react to these levels.

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

Sell Signal - How to Trade CFD with Moving Average Method

Resistance Level turns Support Level

In CFDs - When a resistance level is broken it turns into support and vice versa.

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

Resistance Level turns Support Level - Moving Average CFD Method Example