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What are the best moving average indicators?


TRADING INFORMATION WE GET FROM THE MOVING AVERAGE 1. Firstly the position of the price relative to the moving average gives you a good indication as to which mode the price is in – very simply if the price is above the moving average it is in the buy zone and below the moving average it is in a sell zone. 2. Secondly, the angle of the moving average determines the latest trend of the price. If the angle is up, it is in a buy direction and if the angle is down, it is in a sell direction 3. The amount of time (the number of periods) the price spends below or above the moving average helps us determine the strength of the trend. 4. The distance of the price from the moving average determines the strength of the latest market move as result of a change in trend. 5. The moving average helps us determine a type of non horizontal support or resistance barrier that the price movement is creating. 6. By displacing the moving average (which is based on the last 3 historical candles) 3 periods forward we are using history to predict the likely future position of the price in 3 periods time. It is this deviation from this prediction that provides trading opportunities (we will see this later on). This turns the Moving Average into a leading indicator. 7. The direction that the price is moving in relation to the moving average direction (parallel or at right angles) is additional information – if the price is moving towards the moving average it signals a possible trend reversal and if it is moving away from the moving average it is signalling a strong trend. 8. When the moving average is moving through the current candles it likely that there is no trend and the market is trading sideways

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