Leading Indicators

MA Leading XAGUSD Trading Indicators

A trader can choose a moving average based on the chart time frame that he is trading; the trader might choose to use this Moving Average indicator on the minute silver charts, hourly silver charts, daily silver charts or even weekly charts.

The silver trader can also choose to average the closing trading price, opening trading price or median price.

Moving average indicator is a oftenly used indicator to measure strength of silver trends. Data is precise & its output as a moving line can be customized to a trader's preferences.

Using the silver trading moving average is one of the basic ways to generate silver buy and sell trading signals which are used to trade in the direction of the silver trend, since the Moving Average indicator is a lagging indicator & a trend following indicator - this means that it will tend to give late silver entry signals as opposed to leading indicators. However, as a lagging indicator it gives more accurate silver signals and is less prone to whipsaws compared to leading indicators.

Traders select the moving average period to use depending on the type of silver trading they do: short term silver trading, medium term xagusd trading and long term xagusd trading.

• Short-term silver trading: 10 - 50 Moving Average Period
• Medium-term silver trading: 50 - 100 Moving Average Period
• Long-term silver trading: 100 - 200 Moving Average Period

The trading price period in this case can be measured in minute silver charts, hourly silver charts, daily silver charts or even weekly silver charts. For our example we will use 1H chart time frame period.

Short term silver trading moving averages are sensitive to price action and can spot trends signals faster than the long term moving averages. Shorter term silver trading moving averages are also more prone to whipsaws compared to long term moving averages and a trader should choose a trading price period that will generate a signal early but not give too many silver whipsaws.

Long term silver trading moving averages help avoid silver trading whipsaws, but are slower in spotting new trends and silver trend reversals.

Because long term moving averages calculate the average using more price data, it does not reverse as fast as a short term silver trading moving average and it is slow to catch the changes in the silver trend. However, the longer term silver trading moving average is better when the silver trend stays in force for a longer time but may also give late silver signals.

The work of a trader is to find a moving average period that will identify silver trends as early as possible while at the same time avoiding fake-out signals (silver trading whipsaws).