Markets College

Applications of Intraday MA for Support and Resistance Trading The application of this approach is very simple indeed. There are basically three steps involved: Use the dual MA crossover method.

The 8:l ratio suggested earlier should be used. Determine market trend. This is accomplished by examining the price chart for the last crossover signal. If the last crossover signal was a bullish signal, then the trend is assumed to be up.

If the last crossover was a bearish signal, then the trend is assumed to be down. Please consult Figures 4-6 and 4-7 for specifics. Buy on price declines to the longer of the two MAS which serves as support and sell short if the trend is down on price rallies to the longer of the two MA lines.

Again, please consult Figures 4-6 and 4-7 for specific illustrations of this approach. In any case, you will close your position, win, lose, or draw, by the end of the trading session.

Since there is no way to determine whether a decline to the MA line in a bullish market is the start of a new trend down or just a reaction on which to buy, you will need to protect your position with a stop loss.

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