You can use the 200 day moving average as a support and resistance area. One thing to remember if the price is near the 200 MA you should wait for confirmation before you decide to hit the buy or sell button. Waiting for the trend direction off the 200 MA will increase your chances of making a profit on the trade. When a moving average lines up with true buyers and or sellers, the moving average will work a high percentage of the time. It is important that you monitor the volume to make sure that the buyers or sellers are actively involved.The price of the stock is also keyed in to the moving averages.Shorter moving averages for daytrading.
Forex and stock traders are looking for the consistently wrong investor, trader and take the opposite position. This will obviously lead to winning trades for them. All traders have read trading books that point out that increasing volume is good for the continuation of the trend. Many new stock traders will try and fight the trend.
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