The Moving Average Explained !!!

1 Tem 2021

Hello everyone , as we all know the market action discounts everything :)
A lot of people asked me about the MA and how to use it so i prepared this video for you guys explaining it please enjoy .

or if you prefer to read :
what is a moving average : its a simple technical analysis tool that smooths out price data by creating a constantly updated average price..
we use it to to create sell and buy signal (if the price is above the MA then it’s a buy signal , if the price is below the MA then it’s a sell signal )

Now lets talk about the different types of moving averages :
1_ the simple moving average (SMA)

2_ Exponential moving average (EMA)
Notice that the simple MA line is slow which means if the trend moves quickly its gonna take time for the simple MA to move and this is a problem called LAG , but the Exponential MA (EMA) tries to solve this

The EMA is the same as the SMA except it gives more weightage to recent price action
What does this means , it means when the trend changes quickly so does the EMA , the response time on the EMA is much faster then the SMA

So what if we combined them both to try to understand where sell and buy signals are . That’s called a crossover

3_weighted moving average (WMA) it simply combines the features of the SMA and the EMA
Its basically like a hybrid car it uses electric engine and a diesel engine so it has both of the two worlds ,, how ever the WMA is not as poplar as much as the SMA and the EMA

And that’s it now u guys have a better idea on what is a moving average is and its different types

Make sure to Follow and Like for more content

If you have any questions please ask

Thank you for reading & watching .