How do I calculate indicators Moving Average? MA is calculated based on the average value of the movement of the pair. The average value of can be taken from the highest, lowest price, opening, closing or median (middle). Now this indicator MA arguably terms in an online trading application. You don't have to hard-hard to compute, stay You install only.
Understand the meaning of the indicators Moving Average, relative is very easy:
* If the price is now under the line MA, then the trend is Down.
* If current prices are above the line MA, then the trend is rising.
Let's look at the picture below:
Above is an example where the trends are going up/bullish, the easy way to read it is located above the line graph candle Moving Average. The value of 10 SMA means simple moving average with the period of 10, calculated from the average over the previous value of 10.
In fact there is no stroke of an indicator, sometimes there are ripples moving up/candle down trend line (against). It's what most traders will react too quickly as there will be a change in the trend, but then again if this was bound to happen changes? In situations where there is a fundamental news is released, it's possible that the candle will be moving against the trend.
See example picture below. Moving Average trending down.
In situations like this, let us want to trouble a little try view news is just there is news that is being released, see the news weighs, how potential news will change the direction of the trend?
Well let's wait a while and see the developments.
It turns out that the price of returning moving down, so the above reaction is only temporary because there are news that affects movement.
A little trick to analysis and condition as above is, by combining some MA at once. I.e. like yg commonly used by traders is, use the faster and slower MA, MA. Faster MA has the period < Slower MA. According to the language Faster MA (has smaller period) will react faster than slower MA.
And to get a prediction of the direction of the trend that more perfect. Then:
* Trending up : Line Faster MA above the Slower MA.
* Trending down : Line Faster MA under the Slower MA.
See example of merging 2 MA on the trend rising.
Blue line is faster MA, and as the trend up have always been above the line is colored orange (Slower MA).
By combining 2 MA, is expected to be able to give peace a trader in addressing if the ripples move candle.
View of the characteristics of the formula MA indicator, the indicator is categorized in Lagging indicators (Indicators-late), why? Yes, because it is calculated based on values that have appeared or occurred. So lagging indicators can help us determine trends, yet still less adequate for use as a sign to the opening position.
Type of Indicators MA, there are 2 types of MA, who often used:
1. SMA: Simple Moving Average
2. EMA: Exponential Moving Average
The difference in the EMA, is by plotting weights on each value. Where the right is getting large (exponential). The effect that occurs is the line that is formed will react as fast/responsive to price changes.
For more details see the picture below, a comparison of SMA, and EMA lines with the same period is 30.
So if You put 2 simultaneously type MA (SMA, EMA) with the same period, Then in this EMA 30 = Faster MA, and SMA 30 = Slower MA.
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