Explanation of Moving Average ; There are many ways and means that the trader can use to identify and evaluate market movements and trends in the long run, and there are also many tools that the trader can use to determine entry and exit points, and perhaps the most important of these means is the moving average, which is one of the tools Technical Analysis.
Uses of the moving average
The moving average is one of the oldest and most widespread technical analysis tools, and it accurately reflects the prevailing trend of the markets in a specific period of time. During the provision of the available information, and although the moving averages monitor a lagging condition of the market, which is why they are called lagging indicators, they are of great importance as they were essential in developing new trading strategies by creating them.
What is meant by the moving average is the average prices of assets during a certain period of time, and in order to be able to calculate the moving average for a period of ten days, we must put 10 specific prices for a specific asset and calculate their average, and this is called the simple average.
Types of moving averages
accelerating moving averages
This average is calculated through three stages: the first stage is the calculation of the simple moving average, the second stage is the calculation of the weighted multiplier, which is the variable factor that moves prices, and the third and final stage is the calculation of the accelerating moving average.
Accelerated moving averages are used to reduce the delay period by weighting recent prices, and this process is known as adding or subtracting from recent prices based on the number of periods.
Many technical analysts and traders use moving averages in order to identify and evaluate support and resistance positions and this is done through the chart.
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