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Moving Average is a technical indicator. These averages are used for short period analysis.
The moving average is formed to identify the trend , for the convenience of the traders, but not a decision maker . In order to reduce the human job this type of indicator is made by mingling dove theory,price patterns , candles together . The trend is possitive ,when it is above the trend line. If it is below the trend line it is said to be bearish. It does not function satisfactorily in side ways trends. The trend line is designed to both attract and repel like magnet. It works well in trends. It is formed by using closing prices of consecutive days .
It is an average of all the past day prices using which one can identify which trend is dominating
Moving average is the average of the past closing prices. It is used as a technical indicator.
It is widely used indicator for trending zones .
When prices go above MA – Bullish trend (buy) ; When it goes below MA – Bearish trend (short sell ).
But it not efficient for sideways movement.
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