the most popular indicator for all trader/s
its always will include in most of strategy or system of any trade , so lets talk about it
and how to use
first : what is moving average :
In statistics, a moving average (rolling
average or running average) is a calculation to analyze
data points by creating a series of averages of different subsets of
the full data set. It is also called a moving mean (MM)[1] or rolling
mean and is a type of finite impulse response filter.
Variations include: simple, and cumulative, or weighted forms.
Given
a series of numbers and a fixed subset size, the first element of the moving
average is obtained by taking the average of the initial fixed subset of the
number series. Then the subset is modified by "shifting forward";
that is, excluding the first number of the series and including the next value
in the subset.A
moving average is commonly used with time series data to smooth out
short-term fluctuations and highlight longer-term trends or cycles. The
threshold between short-term and long-term depends on the application, and the
parameters of the moving average will be set accordingly. For example, it is
often used in technical analysis of financial data, like stock prices, returns or
trading volumes. It is also used in economics to examine gross
domestic product, employment or other macroeconomic time series.
Mathematically, a moving average is a type of convolution and so it
can be viewed as an example of a low-pass filter used in signal
processing. When used with non-time series data, a moving average filters
higher frequency components without any specific connection to time, although
typically some kind of ordering is implied. Viewed simplistically it can be
regarded as smoothing the data.
let see how the traders use it
Use the same MA's as many of them and you'll do alright.
Many traders use the Fibonacci numbers, 8, 13, 21, 34, 55...
Many use the 20, 50, 100, 200,
Some use 25, 40, even the ten,
Most use EMA, I think, sometimes with a simple on the longest time frame they use, i.e. the 200
I use
(8) MA - Exponential
(21) MA - Exponential
(55) MA - Exponential
(89) MA - Exponential
I trade primarily the 1H charts
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