![]() ![]() ![]() This trading system, which is based on the moving average, is not designed to provide entrance into the market right in its lowest point, and its exit right on the peak. When the instrument price rises above its moving average, a buy signal appears, if the price falls below its moving average, what we have is a sell signal. The most common way to interpreting the price moving average is to compare its dynamics to the price action. Exponential Moving Average and Linear Weighted Moving Average attach more value to the latest prices. In case we are talking of Simple Moving Average, all prices of the time period in question are equal in value. The only thing where moving averages of different types diverge considerably from each other, is when weight coefficients, which are assigned to the latest data, are different. It is often the case when double moving averages are used. Moving Average may be calculated for any sequential data set, including opening and closing prices, highest and lowest prices, trading volume or any other indicators. There are four different types of moving averages: Simple (also referred to as Arithmetic), Exponential, Smoothed and Weighted. As the price changes, its moving average either increases, or decreases. When one calculates the moving average, one averages out the instrument price for this time period. The Moving Average Technical Indicator shows the mean instrument price value for a certain period of time. Request a presentation of MetaTrader 5 for Hedge Funds.Request a presentation of MetaTrader 5 for Brokers.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |