Moving Average trading indicator Forex (MA).

Simply Moving Average trading indicator Forex (SMA)

Simply Moving Average trading indicator Forex (SMA) - probably simplest, oldest and most world wide spread trading indicator. So, Simply Moving Average trading indicator Forex (SMA) 200 days long was most popular and enough effective analyze tool for some decennial event. For this indicator calculate needs sum 200 last close prices and division it by zero. When the computers was not so spread, analysts made simply this procedure, sum close prices for 40 weeks and divide it by 40 then (trade week consist of 5 days, so 200 days it's 40 weeks). Or even more simply - by 10 months close prices using. All this methods gives similar results so the Simply Moving Average trading indicator for following to trend popularity not decreased many years long. In spite of seem primitively Simply Moving Average trading indicator is effective tool for trend following and smoothing different data.

As the current value of Simply Moving Average (SMA) trading indicator Forex is calculates by use two magnitudes only so it can be calculated even without PC. For example, if we use 10-periods Simply Moving Average (SMA) trading indicator Forex. When last bar closed it's need to subtract oldest close from Simply Moving Average (SMA) trading indicator Forex and add last close and divide it by 10.

Exponential Moving Average trading indicator Forex (EMA)

Exponential Moving Average trading indicator Forex (EMA) sometime called "Exponential Smoothing". Use Exponential Moving Average trading indicator Forex (EMA) it's the best way working with Moving Averages. Most of Forex analyst prefer Exponential Moving Average trading indicator Forex (EMA). Exponential Moving Average trading indicator Forex (EMA) it's ideally compromise between high sensitivity Weighted Moving Average trading indicator Forex (WMA) and high backlog Simply Moving Average trading indicator Forex (SMA). Unlike majority another methods of smoothing Exponential Moving Average trading indicator Forex (EMA) follow trend more smoothly, with minimum of random jumps and minimal backlog.

Exponential Moving Average trading indicator Forex (EMA) calculation method is very advantageously for user: in Exponential Moving Average trading indicator Forex (EMA) little calculations, not very complex data processing and no too much data needs for it. For new Exponential Moving Average trading indicator Forex (EMA) value calculation needs last bar and last Exponential Moving Average trading indicator Forex (EMA) value only. So for today Exponential Moving Average trading indicator Forex (EMA) value need yesterday Exponential Moving Average trading indicator Forex (EMA) and today close price. Such way allow to seriously accelerate Exponential Moving Average trading indicator Forex (EMA) calculations.

Vital advantage Exponential Moving Average trading indicator Forex (EMA) is impossibility got wrong values by reason of exclude old data from calculation. Old data influence increased for time. Exponential Moving Average trading indicator Forex (EMA) calculation method allow to avoid errors, given by old and less important data exclude.

Exponential Moving Average trading indicator Forex (EMA) calculates by this way:

EMA = 2*(Close - EMA previous)/(n + 1) + EMA previous

here:

n - Exponential Moving Average trading indicator Forex (EMA) period

Moving Average's slopping trading indicator Forex

Moving Average's slopping trading indicator Forex value get by subtraction Moving Average trading indicator Forex (MA) n periods before value from current Moving Average trading indicator Forex (MA) value. Often traders uses some trading indicators not realize that use one trading indicator in its different variation, like in follow interesting samples:

1)    Exponential Moving Average trading indicator Forex (EMA) changes itself slopping from one to another in the same time when close price crosses Exponential Moving Average trading indicator Forex (EMA).

2)    Simple Moving Average trading indicator Forex (SMA) changes itself slopping from one to another in the same time when Rates of Change the same period that Simple Moving Average trading indicator Forex (SMA) crosses itself zero lines.

3)    Weighted Moving Average trading indicator Forex (WMA) n periods long changes itself slopping from one to another in the same time when close price crosses Simple Moving Average trading indicator Forex (SMA) (n - 1) periods long.

So, different at first thought trading indicator Forex gives alike result.

Moving Average (MA) filters and Some Confirmation Principle

Moving Average (MA) filters and Some Confirmation Principle uses one or some more long Moving Averages (MA) for less long Moving Average (MA) signals filtering. So amount of deals decreased relative amount of deals based on just one short Moving Average (MA). For example see rule of trade, based on two Moving Averages (MA) - one more long and another more short. It's buy, if close price rise above long Moving Average (MA) and short Moving Average (MA). It's sell, if close price lower under long Moving Average (MA) and short Moving Average (MA). Note, that replace word "and" to "or" greatly changes trade process. Trades frequency with "or" much more than with "and" word.

Analysis in some timeframes with Moving Averages (MA) crossing rule use

One of the most world wide spread Forex trading indicators is Moving Averages (MA) crossing rule. It's buy, when price crossed Moving Average (MA) from below upwards and sell, when price crossed Moving Average (MA) from top to bottom.

Triple Moving Averages (MA) using strategy working well for developed more hundred years ago technical analysis principles for some timeframes, and it's purpose - defining three types of trends. If it's describe in Dow theory words:

1)    Start with long-term main trend, which easy to define with 200-periods Moving Average Forex trading indicator (MA)

2)    Define middle-term trend with 50-periods Moving Average trading indicator (MA)

3)    Looking for small trends by using 10-periods Moving Average trading indicator (MA)

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