Trade Stock Indices

About Moving Average(MA) Trading Strategy - Trading Strategy Example

The moving average for stock indices is a top tool since it's straightforward.

This specific indicator functions as a trend-following tool, employed by traders for these three primary purposes:

  • Identify the beginning of a new Index market trend
  • Measure the sustainability of the new Index trend
  • Identify the ending of a trend and signal a reversal signal


The Index Moving Average or MA is used to smooth out market volatility of price action. The MA(Moving Average) is an overlay indicator & it is placed on top or super-imposed on the price chart.

In the example chart here, the blue line is a 15-period Moving Average, which helps to smooth out the market's ups and downs in price.

Moving Average Strategies Example - About the Moving Average MA Strategies

Stock Index Moving Average - MT4 Chart Indicators

Calculation of the MA

The Stock Index Moving Average MA, also called MA, is found by averaging the price using the newest price information available.

A moving average over 10 periods is called a 10-period index MA. Index traders often use days as the base, so we call it the 10-day MA.

To calculate the ten-day Moving Average, the prices from the preceding ten days are averaged: this Index moving average indicator is then continuously adjusted following the conclusion of each new Index price interval. After each new Index price period is established, the moving average is recalculated using only the most recent ten price observations, which is why it undergoes constant revision - it is perpetually "moving" as price data is refreshed.

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