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Archive for December, 2020

05
Dec
2020

The Best Indicator for Forex

by admin

A moving average, that is one of the best trading view indicator, is calculated on a series of prices of a financial instrument and is “mobile” because it moves from period to period precisely because of its calculation method. In simple terms, given an average of a certain time period, the most recent data is added each time by eliminating the last data of the series from the calculation.The extreme ease of use makes moving averages one of the first and most essential graphical analysis tools used by traders (newbies but also professionals). The use of moving averages allows those who operate a series of fundamental considerations: both from the point of view of analysis, to understand at a glance and immediately what the current trend is; both from an operational point of view for a possible entry into the position (long or short entry level).Moving averages are an indispensable tool for eliminating the so-called market noise, and giving the trader a correct view of that fluctuating trend, made up of small corrections, which risks distracting attention from the underlying direction of the instrument analyzed.By increasing the length of a moving average (i.e. by increasing the number of periods considered) we will make it softer and less reactive (less influence from the last n prices detected) and we will increase its lag with respect to the graph. The moving average must not be used to predict a future trend of the analyzed instrument. The moving average is a trend indicator. The signaling of the beginning of a trend occurs with a delay the greater the longer its duration. The choice of the periods of a moving average is fundamental for the correct graphical analysis of the chosen instrument.Generally, if you use a daily chart, 50 and 200 day moving averages are recommended to get better information on the underlying trend. If you use intraday charts (5 minutes, 15 minutes, hourly) the number of periods to be considered is reduced (8 or 21 period moving averages) and you also use advanced types of moving averages that is, they reduce the delay of the moving average with respect last price (e.g. exponential moving average, Hull moving average, exponential zero lag moving average or the TEMA indicator).Moving averages are used very often in Trend Following strategies or strategies that are efficient when there is a concrete trend on the market (up or down).

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