What is Moving Average?

[Darshan Sanwal]

Moving average is a type of technical analysis which helps us to find the bullish and bearish trend.

[dharanija]

Moving average is a widely used indicator in technical analysis. there are two commonly used indicators: simple moving average and exponential moving average

[Thiyagharajan]

Indicators give us an idea of price movement and to confirm the trend.
It is used to confirm the trend we have identified using dow theory,price patterns, candle stick charts.

Moving average (lagging indicator/Trending indicator)
I open the price chart and apply the moving average (for short term use 21days).
The moving average line gives a smooth line on the chart, from which we can identify price is moving up or down.

If the current price is above the moving average – Trend is +ve (bullish)
If the current price is below the moving average – Trend is -ve (bearish)

Moving average works during trending time. we disqualify MA during non trending (sideways movement).

[Vasanth]

Average Price of last 21(or user defined) days is Moving Average

[Anitha ponnarasu]

Moving average can applied for short term (21days price movement). It works during trending, not support sideways movement.

Bullish trend:

The trend is positive till the current market price is above the average.

Bearish trend:

The trend is negative till the current market price is below the average.

 

[Author]

Posts