The moving averages, neckline, and trend lines in trading are the most commonly used technical indicators for support and resistance levels.
Let's first talk about moving averages. The full name of moving averages is Moving Average (MA), which is a technical indicator used for statistical analysis in trading. It averages the prices or index prices over a certain period and connects the average values over different times to form a price average line. Moving averages are used to analyze the trend of price and index price changes.
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This means that we first add up the closing prices of the past N candlesticks and then divide by N to obtain an average price, and then connect the series of average prices obtained into a line. For example, the 60-day moving average is obtained by adding the closing prices of the previous 60 candlesticks and dividing by 60, and then connecting the values corresponding to these 60 candlesticks into a line, resulting in a 60-day moving average line. Using the same method, we can obtain the 5-day moving average, 10-day moving average, 30-day moving average, and any moving average for different days. Investors generally consider the 5-day moving average as a short-term average, the 10-day moving average as a medium-term average, and the 30-day moving average as a long-term average. In trending markets, short-term and medium-term averages often intertwine, while long-term averages generally serve to guide the direction of the trend.