Moving Average

Moving Average Charts

- Technical Analysis, Indicators

Technical Analysis

Technical Analysis, Studies, Indicators:

Moving Averages

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Description: lagging technical indicators, technical analysis, basics of technical analysis, bullish and bearish trend confirmations

Moving averages are one of the most popular indicators used in the technical analysis. Moving averages smooth out data, which is especially helpful in volatile markets.

The two most popular types of moving averages are:

The Simple Moving Average (SMA) - the average (mean) price of a security over a specified number of periods;
The Exponential Moving Average (EMA) applies to weighing factors to reduce the lag in simple moving averages.

Price moving averages smooth out prices and make it easier to identify the trend direction. Since past price data is used to calculate moving averages, this price moving average is considered a lagging indicator, or trend following indicator. Price moving averages will not predict a change in trend, but rather follow behind the current trend and they are best suited for trend identification and trend following purposes, not for prediction.

Chart 1: Simple and Exponential Moving Averages
MA - Moving Averages Chart

As a rule the price moving averages are used to confirm trends, resistance and support levels as one of the components of different trading systems. It is recommended price moving averages be used in conjunction with other technical indicators. Using moving averages as part of a trading system to confirm other indicators can greatly enhance this trading system.

V. K.

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Technical studies classified by the types of technical analysis

MV Studies - list of technical indicators (studies) developed MarketVolume® team. We are the first who introduced this indicators to the world and at the current moment we are the only company that provides these indicators and we consider ourselves these indicator developers.

Price Studies - information about calculation and using RSI, Stochastics, MACD, and other price based technical indicators (studies) which are available with our charts.

Volume Studies - a list of volume based technical indicators (studies) which are available with our charts.

Advance/Decline Studies - list of advance decline based technical indicators (studies) which are available with our charts

Volatility Studies - a list of technical indicators (studies) which are used to measure market and security volatility and are available with our charts.