The foreign exchange moving average indicator is a technical indicator commonly used by foreign exchange traders, but the foreign exchange moving average indicator is difficult to use, so it is not recommended for foreign exchange novices to choose to use it. Today, Yuhui International Network will explain to you the skills of using the foreign exchange moving average indicator.
What is the foreign exchange moving average indicator?
The foreign exchange moving average indicator reflects the change in the average cost of the market over a period of time. The moving average system formed by multiple moving averages can be used as an important reference for judging market trends. In addition, the moving average can also provide a reference for exchange rate support and resistance.
Moving averages can be divided into ordinary moving averages and exponential moving averages according to different calculation methods. The ordinary moving average is an ordinary average of the exchange rate, while the exponential moving average is calculated differently. The exponential moving average adopts an exponential weighted average. The closer to the day’s data, the greater the weight, so to a large extent, the exponential moving average can reflect market changes faster. However, the two moving average indicators are not absolutely good or bad, and have different effects in different stages of operation.
Next, I will introduce you to the tips for using the foreign exchange moving average indicator:
- The setting of the moving average system. Arranging multiple regular moving averages together can form an moving average system. The moving average system can be more helpful to help traders analyze. There are two common parameter arrangements for the moving average system:
Equal span arrangement: A, 5, 10, 20, 30, 40, 50
Fibonacci arrangement: B, 5, 8, 13, 21, 34, 55
- Regular use skills of moving average. The moving average has two basic functions. One is that the form of “Golden Cha” and “Dead Cha” can indicate the basic signals of the market. The golden cross and dead cross signals issued by the moving average indicator can provide mid-term or short-term trading opportunities and position signals. Another function of the moving average is = can predict the support and resistance of the exchange rate. The obvious resistance effect of the moving average on the exchange rate can be seen on the moving average system. In addition, the moving average will also exert a “gravity” effect, pulling the exchange rate to a callback.