About MA Trading Strategy - Trading Strategy Example

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

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

• Identify the beginning of a new market trend
• Measure the sustainability of the new trend
• Identify the end of a trend & signal a reversal signal

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

On the example Stock Indices trade chart below the blue line represents a 15 period MA, which acts to smooth out the volatility of the price action.

Indices MA Moving Average Indicator - MT4 Trade Chart Indicators

Calculation of the MA

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

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

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