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AS Chakravarthy NCFM Academy Hyderabad Stock Market Technical Analysis : Moving Average
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EFFICIENT TRADING WITH MOVING AVERAGES
Stock Market Technical Analysis Courses Training in Hyderabad,
The Moving Average is a Lagging Indicator showing the average value of a security price over a period of time. Calculating a moving average, a mathematical analysis of the security's average value over a predetermined time period is made. As the security's price changes, its average price moves up or down.
TO KNOW OUR Stock Market Training Institute in Hyderabad Please Visit AS Chakravarthy NCFM Academy Hyderabad.COMMON AND POPULAR MOVING AVERAGES:
ADAPTIVE MOVING AVERAGE
EXPONENTIAL MOVING AVERAGE
TRIANGULAR MOVING AVERAGE
TYPICAL PRICE MOVING AVERAGE
WEIGHTED MOVING AVERAGE
Simple Moving Average
The Simple Moving Average is arguably the most popular technical analysis tool used by traders. The Simple Moving Average is often used to identify trend direction, but can be used to generate potential buy and sell signals.
Exponential Moving Average (EMA)
The Exponential Moving Average (EMA) weighs current prices more heavily than past prices. This gives the Exponential Moving Average the advantage of being quicker to respond to price fluctuations than a Simple Moving Average yet, that can also be gazed as a disadvantage because the EMA is more prone to whipsaws .
Moving Average Crossovers.
Moving average crossovers are a common way traders can use Moving Averages. A crossover occurs when a faster Moving Average crosses either above a slower Moving Average which is considered a bullish crossover or below which is considered a bearish crossover.
INTERPRETATION
Moving averages can also be calculated and plotted on indicators. The interpretation of an indicator's moving average is similar to the interpretation of a security's moving average when the indicator rises above its moving average, it signifies a continued upward movement by the indicator when the indicator falls below its moving average, it signifies a continued downward movement by the indicator.
Indicators which are especially well-suited for use with moving average penetration systems include the MACD, Price ROC, Momentum, and Stochastics.
when a short-term moving average crosses above a longer-term moving average. Downward momentum is confirmed with a bearish crossover, which occurs when a short-term moving average crosses below a longer-term moving average.
STRATEGIES FORM USING MOVING AVERAGES
Whether short term or long term set an suitable period moving average. The 12 day and 26 day EMA are popular short term averages used by traders, 20 and 50 day averages for medium term and swing trading, 100-200 day EMAs are used for the identification and benchmarking of long term trends.
Different traders and investors use moving averages for different purposes. Some use them as their primary analytical tool while others simply use them as confidence builders to back up their investment decisions.
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