Category: Money tips Release Date: 2007-04-01
Market economy, to make money is simply to reduce costs or increase revenue in order to obtain higher profits. On the stock market is concerned, it is to buy low and sell high, buy when the lower the better, and sell when the higher the better. However, the stock Shangcuanxiatiao is not determined by the will of the individual. Thus, the majority of investors, particularly the mass retail, be sure to eat the prospective trend, may be boats sailing downstream, contrarian often Jifeidanda
.
How, then, it judged the general trend? In the technical analysis of various indicators, the moving average line is to use the most, accuracy, relatively, one of the best indicators. To learn more about moving average line, we must first grasp the moving average.
In the field of technical analysis, moving average is a more important concept, is not only the moving average line, but also a number of technical indicators, such as a deviation from the rate, the relative strength index, both the amount of lines, which are built on the basis of .
The so-called moving average, first, the arithmetic mean, such as 1 to 10 10 numbers, the average is 5.5; while the move means that 10 figure changes. If the first group is 1 to 10, the second group of changes into a 2-11, the third group was changed 3 to 12, then the average for these three groups vary. The average of these different collections, it referred to as moving average.
Moving average concept is based on the famous Dow theory. Although Dow theory, legendary, but the theory, after all, a bit mysterious, while the moving average of this theory to digital, from digital to predict the future changes in stock prices in the short, medium and long-term changes in direction, more for the majority of investors acceptance.
Another advantage of moving average is that it exposes the average cost of the secret. In fact, the moving average is the average cost. In addition, the average cost for individual stocks as well as the general trend of the future direction are analyzing the role. Stock (or index) fluctuations in large, non-regularity, it is easy to see that trend. The average cost, which is calculated net of nothing more than the previous, plus the day. If the trend is rising - despite its ups and downs - but overall, it was deducted in front of a small number, plus the back of a large number, the average cost is bound to growing stayed one day, the average cost far more than value for the Unit, the trend is bound to U-turn down. Because the price is too high, increasing the cost of share purchase, no one to take over, but the other shareholders will have to hurriedly clearance profit. Market are sold without buying, of course such a result.
On the contrary, when the downward trend in general, in front of a large number of deductions, plus the back of a small number, the average cost is bound to become smaller and smaller, small enough to far below the value of the Unit, the holdings of the hold-up naturally reluctant to throw; short positions and believe that the time has come to begin to take over, going-rate until there is no selling to buy when the trend will have to turn on the U-turn.
In sum, after deducting the old data, addition of new information, which is the essence of the moving average is also the basis of technical analysis lies.
Edited in the gold-line
