Moving averages may be used to filter out noise and show us trends. In this lesson we’re going to look at some different types of moving averages, ways to use different combinations of moving averages, crosses between moving averages and then we’re going to consider how they are used in traditional technical analysis.
What is a Moving Average?
Also called a rolling or running average (mean).
Use in time series analysis to:
- Smooth out short-term fluctuations
- Filter out noise
- Highlight longer-term trends
Types of Moving Averages
Comparison of MA Types
Comparison of MA Lengths
Price Touching or Crossing MA
Moving Average Slopes
Moving Average Crosses
Look Into Stats Behind Tools You Use
Much of the received wisdom of technical analysis is market lore…
Handed down from past gurus or authors…
Much of it comes from an era when data was not easily accessible and when tools to analyze data easily did not exist.
Today, we can test easily, and results can be surprising.
Moving Average Crossovers
Out of Sample Results
Moving Average Trend Indicator Stats
- What is a moving average and why use them?
- Explore different types and combinations of averages.
- Consider how they are used in traditional technical analysis.
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