When we are dealing with some of the market’s most commonly traded assets, one of the first name that tends to come up is the NASDAQ stock benchmark. Some of the biggest biotech companies are listed on the NASDAQ, so it is important to understand how some of the popular trading strategies actually work. It is true that not all biotech stocks are listed on the NASDAQ but given the common association with the index as the central tech benchmark, this is a good area to start if you are looking for ways to start trading in the broader markets.
It can also be argued that the best platform for trading is the MetaTrader 4 platform, which is also referred to as MT4. The platform itself is highly customizable we well-tailored to technical analysis trading strategies in the active markets.
The NASDAQ was founded by the National Association of Securities Dealer (NASD), which allowed the investor to trade securities in a much more efficient way through computerized trading platforms. To be precise, it contains more than 3000 stocks that deal with some of the most advanced technology companies in the world. Here, we will look at one of the best technical analysis strategies that can be used when trading in the NASDAQ stock index.
NASDAQ Bar Chart
Figure: NASDAQ with 100 MA, MACD and Support and Resistance Levels
Many professional traders trade the NASDAQ with 100-day simple moving and MACD on an MT4 trading platform. The “100-day moving average” acts as the dynamic support and resistance level in the NASDAQ chart. Traders draw key support and resistance level confluence with the 100-day moving average. As soon as the valid key support and resistance zone are marked in the chart traders look for MACD crossover.
At point A the first sell trade was triggered with the break of key support zone near the 100-day moving average. Professional traders take confirmation from MACD crossover when the trading signal is found in the chart. At point B the long trade was triggered since the 100-day moving average acted as dynamic support and trade signal was confirmed as valid with the MACD crossover. Traders use tight stop loss while trading with this MACD and moving average strategy.