Moving averages as a dynamic expression of support and resistance.
We know that moving averages (or moving average, MA) are averages of sessions taken by N number of cases. An MA of 10 meetings took the average of the closing and get a value that comes from this equation. We prefer to think of that value as the average market thinking. One function of the MA is to tell you where the dominant trend in prices. But look at the MA from its dynamic support and resistance.
First we must look for an optimization of the extent of the MOU, all those who have been broken over and over again like a MA of 5 sessions we serve for our purpose.
Consider two measures that represent the medium and long run, such as for example the MA 100 sessions and 200 sessions. Let us now see how it behaves.
In Chart 5, GBP / USD in 1 hour, see it as the price bounces back each time they try to outdo the MA 100 and when the excess is taken with the MA 200 and frankly can not overcome it. This indicates that these two MA to provide the dynamic areas of price support or resistance.
How to interpret? Well, again resorting to the concepts on S1, S2 and R1, R2, and this is how to interpret the MA as a support and resistance and dynamic mathematical.
They will work for you as the areas to beat for the price. Remember also that while the price is below the MA, the trend is bearish, while if it is above the MA value is increasing, and it is important to operate with this trend.
