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 Calculation of moving average.

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Join date : 2011-04-13

PostSubject: Calculation of moving average.   Tue May 17, 2011 3:21 am

Moving average (MA) is one of the most popular and easy to use tool available to the fx technical analyst. By using an average of market prices, MA‘s smooth a data series and make it easier to identify the trends. That's especially helpful in volatile currency markets. You can create MA‘s from any number of trading periods but the most commonly used are the 10, 15, 20, 50, 100, 200 and 380 day MA. The indicator moves because as each new data number is added the oldest data number is dropped. For example, a 50-day MA is calculated by taking the closing prices for the last 50 days of any currency pair and summing up them together. Then the result from the calculation is divided by the number of single periods (for instance, 50 days). Then the period moves "j" times (j > 0) so that it always represents the average of the last 50 days over the last "j" periods. The moving averages are calculated using the following formula:
MA = Sum(prices, n) / n Read more calculationsabout moving averages ...
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