What is a Moving Average?
Moving averages are trending indicators and are widely used because of their simplicity and effectiveness.They do not foresee price direction, yet rather define the current direction, though they lag due to being based on past prices.
Often times, I find traders use technical indicators and follow their Buy/Sell signals blindly, without really understanding how that indicator is to be used. One of the first thing you have to know when you use an indicator is to know what category it falls in. The majority of indicators out there are either the oscillating or trending type. Continue reading