Trading Short-Term and Long Term Price Period of MA

A trader can choose to adjust the price periods used to calculate the moving average MA.

If one uses short price periods then the MA will react faster to the changes in the market price.

For illustration if a gold trader uses the 7 day MA then, the moving average indicator will react to the price change much faster than a 14 day or 21 day MA would. However, using short time price periods to calculate the Moving Average might result in the technical indicator giving false signals (whipsaws).

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If another trader uses longer chart time periods then Moving Average will react to price changes moves much slower.

For example, if a trader uses the 14 day Moving Average indicator then the average will be less prone to whipsaws but it will react much slower.

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Trading Short-Term and Long Term Price Period of MA