K-line research moving average and cost average Money Tips

Category: Money tips Release Date: 2007-04-30

Investors MA system is an important tool for technical analysis, usually you are using a moving average system and the cost of moving averages systems. Quotes in the sales department we look at the computer to see the 5-day moving average, 10-day moving average and so are generally moving averages. Its algorithm is based on the closing price of each trading day as the benchmark. Like 5-day moving average is to move forward from today, the number of five trading days the closing price of the arithmetic average price of the connection, 10, 30-day moving average algorithm and so on.

Using the method, moving average, the theory can be summarized into three points.

First, the use of moving averages to determine the arrangement of long and short the broad market bear and bull;

Second, the moving averages have fueled and their agents or effect;

Third, when the stock price away from the moving average, the average effect on stock prices attractive. But the moving average of itself, because the algorithm does not take into account volume of factors, only the closing price as calculated on the basis, which makes moving average itself is relatively easy to a large extent been artificially manipulated. Average cost taken into account in the calculation of the volume element, its algorithm is different for each trading day the corresponding price and the price of the product of accumulation of different volume weighted average, 5 average cost of a weighted average of 5 days price of the connection, the rest of analogy, while the average cost of an infinitely long said that all holders of the stock market, the average cost of Jiancang.

The cost of moving average moving average line as compared with the average cost of a period of time to accurately, so than the moving averages to better reflect real market conditions. For example, the average cost of long or short positions arranged fairly stable, there is no reversal in the Quotes before the emergence of pseudo-cross much less than the moving average; the cost of moving averages show a clear support and pressure, especially on the 30th cost averages and infinite the cost of moving average, its support and pressure more apparent.

Average cost of the most important one is the infinite cost of moving average, which is an important watershed in the market CBBC, the stock on top of this, the market playing a chase game, is a bull market; stock In these circumstances, the market in the flesh playing the game, is bear market. Infinite moving average rate of cost fairly stable, compared to a limited period of time with the moving average has a volatile session is not stable enough features.

In a bear market can clearly see that the cost of infinite moving average constitute a high point of a rally until it was eventually a strong increase with the amount of breakthrough, it declared the end of bear market. In a bull market, the endless cost of MA is very difficult to be short-term pullbacks punctured and an obvious support; and when stock prices fall below this line, when you often become the last chance to escape.

Moving average of turnover due to its algorithm does not take into account factors, only the basis of the closing price, making it as long as the control of the closing price is equivalent to control of the moving average, while the control of the closing price is relatively easy, as long as Yao City issued Power on the list. Have to control costs should average much more difficult, and rely solely on the power of Yao City issued not enough because it can influence although the closing price, but the day has little effect on the weighted average price. Therefore, we recommend investors to focus on what the cost of moving averages.