To identify for each trading day or overnight trade, the need to establish a trend, a consolidation or pause is essential to successful exit. Thus, investors spend a lot of money by buying more expensive financial widgets (indicators) designed to signal when to buy and sell. The grandfather of all indicators is the moving average. But this ad is worth its salt, or is it obsolete?
First, what is a moving average. To understand this is the first thing to understand that the technical analysis widgets based on the same three elements: the price (stock, or in the case of futures and options contracts), volume (number of shares or contracts to be negotiated) and time (as it moves along the course of the day). There are basically two types of indicators, lagging and forecasts. Moving averages by their nature, fall into the group behind.
A lagging indicator summarizes the price movements of the past as future projections. You’ll quickly see why these indicators are lagging. They are distinguished by adding the prices of many past periods, and calculated, then divided by the number of times. Add the final price, that in each of 10 minutes (the price at the 59th second every minute) occurs, then divide by 10. This gives a moving average for 10 minutes. The price may have been moved by the time the current value.
But what is the truth? It is not fiction and it is impossible to predict. The effects of prognostic indicators rather than lagging indicators is that they are just that, a prognosis. Thus, the truth about the card is important to be successful. While an array of technical analysis may also have set of indicators, it must also show the truth.
There are expensive widgets, which are now available that call themselves “non-backward” moving averages. This is an attempt to marry the truth and consequences. Is it recommended? Because the market is not with these “non-delay” indicators. The market knows and understands only a specific group of moving averages. If you do not use versions ago, the market does not know anything about it. Replace lost these artificial means moving and truth.
The key to successful negotiation is to have both the truth and the possible consequences of your cards. So, not to those who pooh moving averages as strictly exceeded because they lagged behind the hearing pooh.
