![]() A 30-period moving average has been added, which appears as a thin red dotted line. Take a look at the daily GBPUSD chart below. This is a simple moving average strategy that provides you with a signal to trade when a faster moving average crosses over a slower one. They can be used in conjunction with other moving averages covering different time periods or other technical indicators to construct a moving average trading strategy. This value is re-calculated every day, discarding the oldest value in the data set, in favour of the most recently occurring day.Ī moving average, therefore, smooths out price fluctuations and can be used to help us identify trends in the market. In other words, we add up each of the last 50 closing prices and then divide the total by 50. How do you calculate a moving average? If we use a 50-day moving average, the value is the mean average of the price over the previous 50 days. The moving part of the name is there because we calculate a new value as each time frame advances, so that the value of our average adjusts with changes in the price. In this article, we will provide a guide of four of our favourite moving average trading strategies and discuss how you can find the best moving average strategy for you!Ī Moving Average (MA) is a mean average continuously calculated over a specified time period. However, far from being just for beginners, the moving average is one of the most important technical indicators and is the basis for numerous successful trading strategies. ![]() The moving average is likely to be one of the first indicators you will discover when learning how to trade Forex online. ![]()
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