Indicators Series – Moving Averages (Final Part)
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Moving averages are one of the most widely used tools in technical analysis. They help smooth out price data, making it easier to identify the underlying trend.
Types of Moving Averages
Simple Moving Average (SMA): Calculates the average price over a specific period. Best for identifying long-term trends.
Exponential Moving Average (EMA): Gives more weight to recent prices, making it more responsive to current market movements.
How Traders Use Them:
Trend Direction: Price above the moving average often indicates an uptrend; price below may suggest a downtrend.
Golden Cross: A shorter-term MA (e.g., 50-day) crossing above a longer-term MA (e.g., 200-day) is considered a bullish signal.
Death Cross: The opposite of the Golden Cross; often interpreted as a bearish sign.
Pro Tip: Combining different moving averages (dual or triple crossover strategies) can help filter out false signals and confirm trends more effectively.
add these into Charts and do your own analysis