Unknown Indicator
Simple Moving Average In A Nutshell
When picking what period length to use, keep in mind the longer you extend to period, the smoother the line will be. Conversely, the shorter the periods the more choppy and variable the line may be. One way to use the moving average is to gauge when a stock is getting to far away, as this can allow you to implement the idea of mean reversion. Using the moving average in conjunction with standard deviation or Bollinger Bands, you can get an idea of where the price average is and plan accordingly.
When you first hop onto a charting platform and look at the tools, you will note the various types of moving averages. You can essentially pick any average type for any given length of time. For this article, we will specifically go over the simple moving average and how you can use it in your investing and trading techniques. How the moving average is calculated is by adding up all the closing prices for the period you determine, and dividing them by the total number of periods you have chosen. Not that you will ever need to do this, it is nice to understand how the tool you are using works.
Closer Look at Simple Moving Average
When implementing this, you want to play around with the periods to full understand what will work best for you trading style. Popular periods include the 20 period, 50 period, and 200 period, but these certainly are not the ones you have to use. Be sure to also use it on a demo account first and tweak everything to your liking. You may even end up finding it doesn’t work for you. Either way, this is a great tool to simply gauge where the market has been and where it might want to be. If you need ideas, join an investing community and bounce your ideas off of everyone, as they are more than willing to help.
Other Indicators
All Technical Analysis
Explore Investing Opportunities
You can quickly originate your optimal portfoio using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did you try this?
Run AI Portfolio Architect Now
AI Portfolio ArchitectUse AI to generate optimal portfolios and find profitable investment opportunities |
| All Next | Launch Module |
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |