There are numerous moving average techniques, ranging from the simple to highly complicated trading systems based on crossovers or price breakouts.
But here’s very important facet about moving averages we need to keep in mind.
They do not perform satisfactory in choppy, volatile contexts or in markets that bound by a trading range.
In trading range conditions, long and short signals will be triggered every time the market fluctuates around the moving average lines.
Reacting to these signals would drain your account.
Before relying on moving averages, we have to keep in mind the fact that market spends most of its time moving from right to left and only a fraction of its time trending.
The bottom line is this.
We will require some filters to help us in figuring out which signals to take or fade.
Check here for more thorough information about Moving averages, their types, and strategies based on them.