How to interpreting moving average indicator ?
The moving average indicator tells the average price for a certain period of time. There are 4 kind of moving average indicators:
- simple moving average indicator
- smoothed moving average indicator
- weighted moving average indicator
- exponential moving average indicator
Moving averages calculates with any sequential data, including highest and lowest prices, closing and opening prices, volume trading or any other indicator. Weighted and exponential moving use more value to the latest price.
How to interpreting moving average indicator ?
The common way to interpreting moving average indicator line is to compare its indicator line to the market price action. When the moving average indicator line moves bellow its market price, a buy signal occurs, and if the moving indicator line moves above its market price, a sell signal appears.
Moving average trading system is not made to give entry the forex market right in its lowest point and its exit right on the highest point. Moving Average indicator forex allows to trade regarding to the following market trend: to short after the market price have reached their high and to buy after the market price touch the lowest point.
Here are the types of moving averages on the chart:
- Simple Moving Average (SMA) indicator forex
- Smoothed Moving Average (SMMA) indicator forex
- Linear Weighted Moving Average (LWMA) indicator forex
- Exponential Moving Average (EMA) indicator forex
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Forex is simple follow the trend and you will rich.
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