Moving averages are trend indicators and are used by traders. It is a tool to verify existing trends and the end of the trend. They enable the trader to view long-term price movements without the short-term fluctuations. A moving average line will change depending on the number of periods chosen the higher the number the slower the average. Some traders will play with a different number of moving averages in different time periods, until they find a series of moving averages that they feel best indicates the behavior of the particular instrument being studied. It can be used.
MACD (12, 26, 9) can be used in an upward trending market. This would be, that the current price does not fall below the moving average line chosen more than once. The moving average should form a support line during upward trends and a resistance line during downward trend. If the upward trend continues, but the moving average line interrupted several times, then it is a good indication that the moving average line chosen is too fast, and not sufficiently adjusted.
When a trader is content with the behavior of the moving average line against the actual prices, he may use the line to signify the continuation of a trend or the end of a trend. If the price closes below the moving average line on two occasions in a growing market, it is an indication of the end of the trend and time to exit a long position. The same logic follows in a downward trending market except in reverse.
The current price needs to close above the moving average on two occasions to indicate that the downtrend is over. Another way of using moving averages is by the pairs. Many traders will first find the long-term moving average as described above and add a faster moving average (smaller period) as an even earlier indication of the end of the trend. If the shorter moving average crosses the slower moving average, it may signal an earlier exit point trend.
￼￼￼￼One can see signal for buying position at 0.72500 on AUD/USD and signals for selling position at 0.73500.