EDUCATION: Moving Average Support Line
Hello, dear subscribers!
Today we examine another one support line type - moving average support.
Definition
Moving average support line is one of the advanced types support lines. It based on price moving average for any period which can be chosen for every particular case. MA helps to define the trend direction at current moment. If the price closed above the MA for at least ten candlesticks in a row we can identify this situation as uptrend.
How to trade with MA support?
Because the uptrend is identified we cam use the MA and price crossing points as entry points. In our case, when (1), (2) and (3) occurs, the next points from (4) to breakpoint can be used to enter the position. In case of success we will see the price touched and bounced off the MA. In opposite, the price break the MA line down, but the stoploss usage can help to eliminate huge losses.
Summary
1)To identify the uptrend when the price closed above the MA 10 times in row
2)To entry the position when the price touched the MA
3)Fix the profit with it's bounce off the MA
4)Set the stoploss to eliminate the losses in case of sharp price decline
Today we examine another one support line type - moving average support.
Definition
Moving average support line is one of the advanced types support lines. It based on price moving average for any period which can be chosen for every particular case. MA helps to define the trend direction at current moment. If the price closed above the MA for at least ten candlesticks in a row we can identify this situation as uptrend.
How to trade with MA support?
Because the uptrend is identified we cam use the MA and price crossing points as entry points. In our case, when (1), (2) and (3) occurs, the next points from (4) to breakpoint can be used to enter the position. In case of success we will see the price touched and bounced off the MA. In opposite, the price break the MA line down, but the stoploss usage can help to eliminate huge losses.
Summary
1)To identify the uptrend when the price closed above the MA 10 times in row
2)To entry the position when the price touched the MA
3)Fix the profit with it's bounce off the MA
4)Set the stoploss to eliminate the losses in case of sharp price decline
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