Trend Trading and Moving Average Lines

Upward Price Trendlines: The 50, 120 and 200 (or 60, 120, 240) moving average lines have layered one atop the other during the initial long upward price movement. The largest moving average line is on the bottom with each next shorter moving average line atop the other. As price had continued its trend upward the vertical distance between each moving average line increased. The moving average lines become farther apart.

Downward Price Trendlines: If price had been falling during a long downward price movement the largest moving average line is on top. Each shorter moving average line is layered beneath each other and below the 200 MA. As price had continued to trend downward the vertical distance between each moving average line increased. The moving average lines become farther apart.

If a longer moving average line is near current price that moving average line can behave as price resistance or price support. If price falls from above and the moving average line is sloping upward that moving average line is support. If price is rising and the moving average line is sloping downward that moving average line is resistance. On any chart they are considered fuzzy, not absolute discrete price demarcation.

How to use Fast Moving Average Trend Lines

chart-upward-trend-currencyThese 14 and 20 moving average lines are used together. They are an indication of shorter trading sentiment and as price movement within a trend. If price has moved upward or downward quickly they are typically far below or above current price. Their distance above or below current price provides information of how far and how quickly price extended in a direction. The rate price ascends or descends during its recent price movement can be better visualized by both the vertical and horizontal distance between recent and current price to the 14 and 20 MAs and by separation between the 14 MA and 20 MA.

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