Technical Analysis of Moving Average Technical Indicator

Trend Identification

The commodity moving average technical indicator can be used as an technical indicator for generating signals. A buy or sell trading signal is generated when commodities trading price either moves above or below the moving average, respectively.

If the MA is heading upward in diagonal manner then the general market trend is upwards.

If the on the other hand the MA is heading downwards in diagonal manner then the general market trend is down-wards.

Upward Trend/Bullish Trend

If the MA is moving up, then the trend is upwards and the signal generated is a buy/bullish trade signal.

As long as the trading price is above the moving average then the trend will remain as an up-ward trend. The moving average will act as a "support level" and commodities trading price action of the chart candlesticks should not close below the Moving Average.

Buy Trading Signal

When the trading price moves above the MA and closes above the moving average, a buy signal is generated.

Traders, who want to confirm the trade signal before implementing it, should wait until the MA line turns and starts to move in an upward trend direction. It is always best to wait for confirmation signal so as to reduce chances of a commodity whipsaw.

Upward Trend - How to Day Trade Commodities: A Detailed Guide to Day Methods

Downwards Trend/Bearish Market

If the MA is moving down, then the trend is downwards and the signal generated is a sell/short commodities trade signal.

As long as the trading price is below the MA then the trend will remain as a downward bearish trend. The MA will act as a "resistance level" and commodities trading price action of candlesticks should not close above the Moving Average.

Sell Trading Signal

When the trading price moves below the MA and closes below the moving average, a sell signal is generated.

Traders who want to confirm the signal should wait until the MA line turns and starts to move in a downward direction. This will reduce the chance of trading a commodity whipsaw.

Downward Trend - How to Day Trade Commodities: A Detailed Guide to Day Methods

Commodity Trading Range Market trading signals

Range Market signals can also be identified using the Moving Average Commodity Indicator.

Moving Average Crossover Method Strategy

The MA cross over method is also another commodities trading signal generation strategy that is more favored by traders compared to the above signal generation strategy method. Moving average crossover commodity strategy is also the simplest form of a commodity system widely used by online traders. This MA crossover method is combined with other technical indicators to form more complex commodity systems and commodities trading strategies.