Technical Analysis of the Moving Average Trading Indicator

Gold Trend Identification

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

If the Moving Average is moving upwards in diagonal manner then the general market trend is up-ward.

If the on the other hand the Moving Average is heading downwards in diagonal manner then the general market trend is downward.

Upwards Trend/Bullish Trend

If the Moving Average is moving up, then the trend is upwards & the signal generated is a buy/bullish trade signal.

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

Buy Trade Signal

When the price crosses above the MA & closes above the MA moving average, a buy signal is generated.

XAUUSD Traders, who want to confirm the trade signal before implementing it, should wait until the Moving Average line turns and starts to move in an upwards trend direction. It is always best to wait for the confirmation signal to reduce chances of a trading whipsaw.

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Downwards Trend/Bearish Market

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

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

Sell Trading Signal

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

Traders that want to confirm the signal should wait until the Moving Average line turns and starts to move in a downwards direction. This will reduce the chance of trading a trading whipsaw.

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XAUUSD Range Market signals

Range Trading Market signals can also be identified using the MA Gold Indicator.

Moving Average Cross over Method Strategy

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

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