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Moving Average Stock Indices Strategies



About the Moving Average Stock Indices Strategy

Stock Indices Trading Moving average is one of the most widely used Stock Indices Indicator because it is simple and easy to use.


This Stock Indices Indicator is a stock indices trend following indicator that is used by Stock Indices traders for three things:


  • Identify the beginning of a new stock indices market stock indices trend

  • Measure the sustainability of the new stock indices trend

  • Identify the end of a stock indices trend and signal a reversal stock indices signal


The Stock Indices Trading Moving Average or Stock Indices Trading MA is used to smooth out the volatility of stock index price action. The MA is an overlay stock index technical indicator and it is placed on top or superimposed on the stock index price chart.


On the example stock indices chart below the blue line represents a 15 period MA, which acts to smooth out the volatility of the stock index price action.

MetaTrader 4 Stock Index Chart Indicators

Stock Indices Trading Moving Average Technical Stock Index Indicator - MetaTrader 4 Stock Index Chart Indicators



Calculation of the Moving Average

The Stock Indices Trading Moving Average is also known as MA - is calculated as an average of stock index price using the most recent stock index price data.


If the MA uses the 10 period to calculate the average of the stock index price then it is referred to as a 10 period stock indices moving average, because most stock indices traders use the day as the standard stock index price period we shall just refer to it as the 10 day MA.


To calculate the ten day MA the stock index price of the last 10 days is averaged, the stock indices moving average indicator is then updated constantly after every new stock index price period. So after every new stock index price period is formed the moving average is then calculated afresh using the most recent 10 stock index price periods, that is why it is called a moving average because the average is constantly moving when stock index price data is updated.

 

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