Probably the most widespread way to use moving averages is in combination with Bollinger Bands. I prefer simple and tidy charts that are easy to spot a market trend. In fact, there are a few popular indicators that are used in conjunction with moving averages.Īs many of you know, I am not a big fan of over-cluttering charts. The use of moving averages in combination with indicators is widespread. Here are some popular combinations of moving averages: The 200-day moving average is the slower one, since it takes more time to affect its curve. On the other hand, the slower the moving average, the higher the period that it is used.įor instance, if we have 50-day moving average and 200-day moving average, the 50-day moving average would be the faster one. In other words, the faster the moving average, the faster the line changes. The use of slow (red) and fast (blue) moving averages appeared when a combination of two or more averages were used on the same chart.Īs a general rule of a thumb, the faster moving average, the lower the time stamp. Here is an illustration to show you how they look: Fast and Slow Moving Averages Moving average combinations are divided into “slow” and “fast”. This makes the Exponential Moving Average a preferred option to many day traders. Since the Exponential Moving Average gives more weight to recent data, it is more sensitive to the recent price moves. Exponential Moving AverageĪn Exponential Moving Average is a variation of moving averages- one that gives more weighing to recent data as opposed to all data. The Simple Moving Average is a preferred choice amongst the longer-term traders. The simple moving average just averages past data.Īs the simplest moving average out there, it is also the most popular kind.Ī simple moving average calculates the average selected period of prices.įor example, a 50-day simple moving average would select the past 50 days of data (usually close of the day) and will plot the MA-line accordingly. So, for the sake of simplicity, I will stick to those two types in this article. There are a few different types of Moving Averages and amongst them the most famous ones are:įrom my experience, probably the two most widely used types of moving averages are Simple and Exponential. #12: Summing it all up- Best Moving Average. #10: Best Moving Average for Long-Term Trading.#8: Best Moving Average for Day Trading.#5: Moving Averages and Money Management.#4: Using Moving Averages with Supply and Demand Zones.#3: Using Moving Averages with Support and Resistance.#2: Using Moving Averages with Indicators.
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