Category: Money tips Release Date: 2006-10-09
MA indicator is actually moving average indicators for short. Since the indicators reflect price trends in running an important indicator of trends in its operation, once formed, will continue for some time, the trend formed to run the high points or low also took out a block or a supportive role, so the point where the average index bit is often a very important support or resistance, which provides us with a good opportunity to buy or sell, average value of the system lies.
In general, the average index has several features such as:
1. The trend to track. Moving average indicator structure principle determines the price it has to reflect the characteristics of the trend is running, so the target can be run on the price to play the role of the trend tracking, and perhaps one day or one moment, price fluctuations will be temporarily run out of the original trend, But as long as the average no corresponding changes in the system, we are not sure the price of running a reversal trend has emerged.
2. Stability and lag. As the average price is the arithmetic average of the closing price after the emergence of new price-point connection, so the price changes relative to the average for the more stable. It is precisely because the average stability of the system and the right trends with this tracking feature, as opposed to changes in price trends, the average of indicators but also has a certain lag. That is, when changes in price trends have emerged when the average indicators of inertia will be in accordance with the direction of the continuation of the original running time, rather than an immediate operation to change the current direction, which is average indicators deficiencies.
3. Fueled the fall of help. It is important to note that the user of a problem, when prices on average for the formation of a breakthrough, the average target price break would be after the operation are fueled by or contributed to the role of fall, especially when the average system, long or short divergence divergence, the resulting The fueled the help or the more intense nature.
To understand the characteristics of the moving average indicator, we will come to summarize the average System principles:
2. Granvile law. This law describes the buying and selling mainly two kinds of situations, when the following three kinds of situations, can be regarded as buy signals; â‘?average decline starting from the flat, bottom-up through the moving average price; â‘?continuous rise in stock prices is far After the sudden drop from the average, but the average increase in the vicinity of re-stabilizing; â‘?below the average share price, and a continuous sharp decline, far from average, these three phenomena are buy signals should be made to see more responses.
The following three kinds of situations, can be regarded as sell signals: â‘?average start to go flat from the increase in the share price from top to bottom through the moving average; â‘?shares falling after the sudden increase away from the average, but average for a renewed decline in the vicinity; â‘?average share price on the wear and consecutive increased substantially, away from the average, these three phenomena are sell signals, should be made to see an empty response.
2. Cross principles. When the price of bottom-up through the moving average, we call this cross gold cross, in general, it is worthy of a buy signal, and when the price of top-down through the moving average, we regard it as the death cross, This phenomenon deserves our attention is often a sell signal.
But needs to be emphasized is that when the price movements into the leather market, that is neither upward nor downward price trend, but kept moving the horizontal direction, the price trend and moving average crossover system, the phenomenon tends to become very frequent , in this case to make a purchase or sale of the operational plan, you must help of a number of other technical indicators, or a comprehensive analysis of morphological theory.
