What is the moving average
Moving average is a simple way to smooth price fluctuations over time. The average closing price of a certain period of time in the past is the moving average. Connecting these moving averages, we can see the moving average in the chart
Like every indicator, the moving average can be used to help us predict future price trends. By judging the inclination of the moving average, we can better judge the potential direction of the market price.
As we said, the moving average can smooth the price trend.
There are different kinds of moving average, and each kind of moving average has different "smooth" degree to the price.
Generally speaking, the smoother the moving average, the slower its response to price movements.
The more the moving average fluctuates, the more quickly it responds to price movements. To get a smoother moving average, you need to get the average closing price data over a longer period of time.
Now, you're probably thinking, "how can I trade with my moving average?"
In this lesson, we first need to introduce you to two types of moving average
- Simple moving average
- Index moving average
We will also teach you how to calculate these data and tell you the pros and cons of the two indicators.
After you understand the relevant knowledge of the mobile average, we will teach you different ways to use the mobile average and how to use them in your trading strategy.
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作者:cleverboy
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来源:Learn forex trading – Foreign exchange blog
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