The derivative and the cost of using moving averages to identify trends Intermediate Money Tips

Category: Money tips Release Date: 2006-06-25

By understanding the geometric meaning of derivative of the slope of the tangent, we can derivative combined with the moving average systems, derivation, and the medium-term averages at each time point from which to look at their inflection point. For example, the cost of moving average 30 days each time point after the results of derivation of indicators made by positive and negative values, meaning its market is this: When the cost of moving average 30 points on the tangent slope from the continuous negative (indicating tape at this time in short order), was transformed into 30, the cost of moving average slope of the tangent points on the continuous positive began to appear when the bull market that has shifted to broader market at this time should be ended short of thinking for long operation. On the contrary, when the derivative value by a continuous positive becomes negative, illustrate how the market has turned, and into bear market at this time should be set a good long stop spots for short operations. Indicators are usually a more clear signal the emergence of a linear function of the judge than the average tape can be advanced for some time, and the accuracy is higher.

From the results of view, on the 20th derivative of the cost of moving average cost than the 30 days moving average effect of the derivative can be more sensitive, but the average cost of 30 derivative can be filtered out some clutter, midline trend effect is good.

Figure 1: 20,051,212 Day zmz_20 on the cost of the derivative a linear indicators [2] at greater than zero, suggesting that broader market into the bull market, the cost of 20,051,214 Japanese zmz_30 derivative of a column on indicators [1] at the zero-axis meteoric rise to a breakthrough, suggesting that broader market into the long market.

Figure 2: 20,031,121 Day zmz_20 on the cost of the derivative a linear index [1] at greater than zero, suggesting that broader market into the bull market, the cost of 20,031,124 Japanese zmz_30 derivative of a column on indicators [2] at a breakthrough meteoric rise to the zero axis, suggesting that broader market into the long the market, 20,040,413 Day 20 and 30, while the cost of the derivative tape prompted to enter bear market, but the cost of the derivative 20, to advance the linear target by the end of February, when early in March there were two relapses, 30 indicators of the cost of the derivative middle column to see a more stable.

â–?Chung Min Lee in Soochow Securities