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    Moving averages are trend indicators that show the direction of prices and potential support and resistance levels. A simple moving average (SMA) is calculated by taking the average closing price over a specified number of past periods and plotting those average prices on a chart. Shorter term SMAs react faster to price changes than longer term SMAs. When a short term SMA crosses above a longer term SMA, it signals the start of an uptrend, while a cross below signals a downtrend.

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    Moving averages are trend indicators that show the direction of prices and potential support and resistance levels. A simple moving average (SMA) is calculated by taking the average closing price over a specified number of past periods and plotting those average prices on a chart. Shorter term SMAs react faster to price changes than longer term SMAs. When a short term SMA crosses above a longer term SMA, it signals the start of an uptrend, while a cross below signals a downtrend.

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    12 views1 page

    Original PDF

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    Baharin
    Moving averages are trend indicators that show the direction of prices and potential support and resistance levels. A simple moving average (SMA) is calculated by taking the average closing price over a specified number of past periods and plotting those average prices on a chart. Shorter term SMAs react faster to price changes than longer term SMAs. When a short term SMA crosses above a longer term SMA, it signals the start of an uptrend, while a cross below signals a downtrend.

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    Technical Analysis MasterClass Cheat-Sheet 2

    MOVING AVERAGE

    Moving averages are the most basic trending indicator. Moving average show what direction the
    price is going and where the levels of support and resistance may be. Moving averages themselves
    can serve as both support and resistance.

    Simple Moving averages (SMA) are calculated by finding the average closing price of an asset at any
    given time and then plotting the points on a price chart. The volatility of a moving average can be
    adjusted by adjusting the time frame of the indicator.

    An N-day Simple Moving Average is calculated by calculating the average of N most recent prices

    Calculations:

    When to use…

    SMA smoothens the price movements and hence is more helpful to identify trends. Short term SMAs
    react faster to prices than longer term SMAs. When short-term moving average crosses above the
    longer term moving average it gives a buying signal and indicates the beginning of an uptrend and
    vice versa.

    Jyoti Bansal - Certified Technical Analyst ( NCFM ), Investment Advisor ( NISM ) 2

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