Technical Analysis of Moving Average Stock Indicator
Stock Trend Identification
The stock trading moving average indicator can be used as an indicator for generating stocks trading signals. A buy or sell stock signal is generated when stocks price either moves above or below the moving average, respectively.
If the MA is heading upward in diagonal manner then the general stock market trend is upwards.
If the on the other hand the MA is heading downwards in diagonal manner then the general stock market trend is downwards.
Upward Stock Trend/Bullish Trend
If the MA is moving up, then the stock trend is upwards and the signal generated is a buy/bullish stock signal.
As long as the stocks price is above the moving average then the stock trend will remain as an upward trend. The moving average will act as a “support level” and stocks price action of the stock chart candlesticks should not close below the MA.
Buy Stock Trading Signal
When the stocks price moves above the MA and closes above the moving average, a buy stock signal is generated.
Stock Traders, who want to confirm the stock trade signal before implementing it, should wait until the MA line turns and starts to move in an upward stock trend direction. It is always best to wait for the confirmation stock signal so as to reduce chances of a stock trading whipsaw.
Upward Stock Trend - How to Day Trade Stock: A Detailed Guide to Day Trading Strategies
Downward Stock Trend/Bearish Market
If the MA is moving down, then the stock trend is downwards and the signal generated is a sell/short stock signal.
As long as the stocks price is below the MA then the stock trend will remain as a downward bearish Stock trend. The MA will act as a “resistance level” and stocks price action of candlesticks should not close above the MA.
Sell Stock Trading Signal
When the stocks price moves below the MA and closes below the moving average, a sell stock signal is generated.
Traders who want to confirm the stock signal should wait until the MA line turns and starts to move in a downward direction. This will reduce the chance of trading a stock trading whipsaw.
Downward Stock Trend - How to Day Trade Stock: A Detailed Guide to Day Trading Strategies
Stock Range Market signals
Range Stock Trading Market signals can also be identified using the Moving Average Stock Technical Indicator.
Moving Average Crossover Method Stock Trading Strategy
The moving average crossover method is also another stock signal generation strategy that is more favored by stock traders compared to the above stock signal generation strategy method. Moving average crossover stock trading strategy is also the simplest form of a stock trading system widely used by online stocks traders. This MA crossover method is combined with other technical indicators to form more complex stock trading systems and stock trading strategies.