A. Moving Average

" If at first you don't succeed, change your strategy, not your goal "

Moving averages are useful in different ways, at different times. Five important uses of moving averages are to help in identifying:

1. Direction of a trend, ranging from short- to long-term
2. Strength of a trend
3. Support and resistance levels in a trend or in a trading range
4. Divergences that occur between indicators and price, suggesting a
possible future trend reversal
5. Trend reversal confirmations, also ranging from short- to long-term

There are three types of Moving Averages:

• Simple Moving Average (SMA)
• Weighted Moving Average (WMA)
• Exponential Moving Average (EMA)

Formula for the Simple Moving Average (SMA):

• P - price of i-bar;
• n - MA period.

Formula for the Weighted Moving Average (WMA):

where :

• P - price of i-bar;
• W - weight of i-bar.

Formula for the Exponential Moving Average (EMA):

EMA(t) = EMA(t - 1) + (K x [Price(t) - EMA(t - 1)],

where :

• t - current time period;
• t -1 - previous time period;
• K = 2 / (n + 1);
• n - EMA period.

How to use moving average ?

1. You can open position when there is a golden cross and dead cross, but make sure you have confirmed it with other indicator.

2. You can use it as a support and resistance ( i already discuss it please go to support and resistance part )

3. Determine the trend