Moving Average (MA)

Definitions

1, A technical indicator showing an average of data for a certain number of time periods. It “moves” because for each calculation, we use the latest x number of time periods’ data. By definition, a moving average lags the market. An exponentially smoothed moving average (EMA) gives greater weight to the more recent data, in an attempt to reduce the lag.

2, A statistical price analysis method of recognizing different trends. A moving average is calculated by adding the prices for a predetermined number of days and then dividing by the number of days.

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