Moving Average Technical Analysis and Moving Average Indices Trading Signals
An indicator that calculates the average value of prices (or any specified data series) over a predetermined period of time.
The only significant difference between the various types of MAs is the weight assigned to the most recent data. Simple moving averages apply equal weight to the prices. Exponential and weighted averages apply more weight to recent indices prices.
The most popular method of interpreting the MA is to compare the relationship between the MA of the price with the price itself. A buy signal is generated when the price rises above its MA and a sell signal is generated when the price falls below its MA.
Buy and Sell Signals generated by MA crossing above or below the price action.
Moving Average Crossover Strategy
Also popular are various types of moving average crossover systems. Such systems often include two or more moving averages crossing above/below each other and perhaps even utilizing other indicators as additional entry and exit confirmation signals. The combinations of conditions for these types of systems are almost limitless.
Moving Average Crossover System