Using Moving Averages

Using Moving Averages

August 6, 2018
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Are important indicators in that they represent levels of support and resistance on different time frames such as intra-day charts, daily charts, weekly charts etc..  They are important indicators because they also show trend direction. Stocks trading above the moving averages are trending up.  Stocks trading below their moving averages are in a downtrend.      There are two types of moving averages; simple moving averages (SMA) and exponential moving averages (EMA). All moving averages are calculated as the average price of a stock over a set period of time.   A simple moving average is the average price over the set number of periods.   An exponential moving average takes the average over the set number of periods, but will weigh the most recent price action more heavily, so that the moving average moves quickly in response to more recent moves.

Example of chart with moving averages, VWAP and candlesticks