Moving Averages

 

Moving Average; Mean within a time interval of the moving averages is a method for calculating directory. The word moving lam is actually used to mean that the mean is not static, but is constantly re-adjusted according to the data added over time. There are 6 types of moving average calculation method. The main difference between these methods is the weight when calculating the average of the most recent days. The strategy used in the “weighted” method alone is different. In this method, the weight of the price is calculated based on the current volatility. Weight increases as volatility increases.

 

Simple: Closing prices are collected for each x day and divided by x. The weight of each day is equal.

 

Exponential: The last days have a greater weight.

 

Weighted: The weight of the last days is more.

 

Regression: Calculated using regression technique.

 

Dema: The weight of the last days is higher.

 

Additive: Another important difference is the averages drawn by the Dema method. The averages drawn by the Dema method have a significant advantage over others. Normally there is a delay in all other averages, but there is almost no delay in the averages drawn by the Dema method, and an earlier signal can be received.

 

One of the most popular uses of moving averages is to compare the stock price with an average or two means.

 

– Buy if price cuts average in upward direction

 

– Sell if price cuts average in down direction

 

Similarly, in two mean comparisons

 

-Buy if short term average cut long term average up direction

 

-Sell if short term average cut long term average down direction

 

The most critical point in moving average is the selection of the average period (period). For short-term trading, short-term averages (such as 3,5,7) and long-term averages (such as 21,50,200) can be tried for long-term trading.

 

Parabolic SAR

 

This indicator is used to determine where the prices stop. Therefore, it is called stop-and-reversal SAR (stop and term indicator).The Parabolic SAR indicator gives excellent points for trading. When Buy; SAR falls below the price, Sell; SAR over the price.

 

Zig Zag

 

A zig-zag indicator can be used to eliminate “noise” in the price of a stock. Zig Zag filters price changes that are less than% x (or x points). It is mainly used to facilitate visual inspection of the graph. Other important turning point because it is an indicator that can be used in dealing with the Elliott Wave count.