How to use moving average strategy in trading as a technical analysis to provide an overview of the buy/sell timing

Employing technical analysis to provide an overview of the buy/sell timing of a company stock

Moving average trading refers to the practice of systematically buying and selling whenever the price crosses its average. The idea is that prices move in trends such that at each point in time, the price is either in an uptrend or in a downtrend. An uptrend is defined as a period of 3 rising prices, and a downtrend is defined as a period of falling prices. When the price cuts up through its average from below because recent prices are higher than older prices, the price is said to be in an uptrend, and a buy signal occurs. 

Similarly, when the price cuts down through its average from above because recent prices are lower than older prices, the price is said to be in a downtrend, and a sell signal occurs. The response following a buy signal is to buy, and the response following a sell signal is to sell. If the change in the price level between buy and sell signals is sufficient to cover costs, moving average trading is profitable. Conversely, if the change in the price level between buy and sell signals is not sufficient to cover costs, moving average trading is loss-making. The chart below is used as an example.