100 Period Moving Average Strategy

A trader can choose a moving average to trade with based on the commodities chart time frame that they use for trading; a trader might choose the moving average to trade 1 min chart, 1H commodity chart, 4H commodity chart, daily chart or even weekly commodity chart.

A trader can also choose to average the closing commodity price, opening commodity trading price or median commodity trading price - when choosing a commodity moving average indicator.

Moving average commodity indicator is commonly used to measure strength of commodity trends. Data of the moving average is precise and its output as a line can be customized to the preferences of a commodity trader.

Using the moving average commodity indicator is one of the basic commodity strategies to generate buy & sell commodity trade signals which are used to trade in the direction of the trend, since the moving average indicator is a lagging indicator & a commodity trend following indicator. The Moving average commodities indicator as a lagging commodity indicator means that moving average will tend to give late commodity signals as opposed to leading commodity indicators. However, the Moving average indicator as a lagging commodity indicator gives more accurate commodity signals and is less prone to commodity whipsaws compared to commodity leading indicators.

Traders select the moving average period to use when trading with this moving average commodity indicator depending on the type of commodity method they use: short term, medium term & long term.

• Short term commodity trading: 20 Period Moving Average Strategy
• Medium term commodity trading: 50 Period Moving Average Strategy
• Long term commodity trading: 100 Period Moving Average Strategy

The period of the commodity moving average in can be measured in 1 min chart, 1H commodity chart, 4H commodity chart, daily chart or even weekly commodity chart. For our commodity trading strategy example we will use 1H commodity chart period.

Short term moving averages are sensitive to commodity trading price action and can identify commodity trend signals faster than the long term moving averages. Shorter term moving averages are also more prone to commodity whipsaws compared to long term moving averages.

Long term moving averages help to avoid commodity whipsaws, but are slower in identifying new commodity trends and commodity reversals.

Because long term moving averages calculate the average using more commodity trading price data points, the long term moving average does not reverse as fast as a short term moving average and it is slow to catch the changes or reversals in the commodities trend. However the longer term commodity moving average is better when the commodity trend stays in force for a longer time.

The task of a trader is to find a moving average period that will identify commodity trends as early as possible while at the same time avoiding fake out signals - commodity whipsaws. As a trader you will need to first test different commodity moving average periods before deciding which commodity moving average period is best suited for your method based on the results of the testing that you'll do using different moving averages.

Commodity Trading Moving Average Strategy

Moving average commodity indicator is a trend following commodity indicator that is used by traders for three things:

• Identifying the beginning of a new commodity trend
• Measure the sustainability of the new commodity trend
• Identify the end of a commodity trend and signal a commodity trend reversal

The moving average commodity indicator is used to smooth out the volatility of commodity trading price action. The moving average indicator is an overlay indicator & it is superimposed on the commodity trading price chart.

On the moving average commodity example shown below - the blue line represents a 20 period moving average, which acts to smooth out the volatility of the commodity trading price action.

50 Period Moving Average Strategy - 100 Period Moving Average Strategy - Moving Average Period Strategy

Calculation of the Moving Average Commodity Trading Price Period

The moving average is calculated as an average of commodity trading price using the most recent commodity trading price data point - commodity periods.

If a moving average uses the 20 period to calculate the moving average then it is referred to as a 20 period moving average, because most traders use the daily chart as the standard commodity trading price period we shall just refer to the moving average as the 20 day moving average.

To calculate the 20 day moving average the commodity trading price of the last 20 days is averaged - and the average is then updated constantly after every new commodity trading price period closes. So after every new commodity trading price period close is formed the average is then re-calculated afresh using the most recent 20 commodity trading price periods, that is why this commodity indicator is called a moving average because the average is constantly moving when price data is updated and re-calculated.