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 Moving averages (MA's)

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Posts : 22
Join date : 2011-04-13

PostSubject: Moving averages (MA's)   Tue May 17, 2011 3:09 am

What a moving average (MA) means? - a type of filter used in forex technical analysis to analyze the currency pair rates by creating a time series of averages of the prices. This process is repeated over the entire data of rate numbers. MA is not a single number, but it is a set of numbers, each of which is the average of the corresponding subset of a larger set of currency rates. In mathematical statistics a MA is an method that calculates the unweighted mean of the last “n“ data numbers. The parameter “n“ is called the time frame size, because the algorithm can be thought of as an frame that slides over the data points. Whenever the time frame slides to the right, one data number, the tail, drops out and one data number, the head, moves in. In other words that is a method for computing an average of a stream of numbers by only averaging the last "n" numbers from the stream, where "n" is known as the time period size. This means, as an example, that prices are averaged over 15 or 50 days (or minutes, or hours, or weeks, or months) depending on a particular time frame you are choosing at the moment of your trading activity. Read more about moving averages ...
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