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Moving average

The moving average is the most famous in the technical analysis. It is simple to calculate the moving average, and you have only to sum up all the closing rates for a certain period and divide it by the number of days. The plots of moving average each day draws a curve which is called simple moving average. There is another way to calculate with make much of the recent market prices, which is called weighted moving average. For your information, the abbreviation of the moving average is MA.

Chartc. 21 days MA, 90 days MA, 200 days MA

Important MA in 21, 90 and 200 days

In the forex market, the moving averages of 21 days, 90 days and 200 days are made much of for the short, middle and long term respectively. The gapping between the current market and the 21 days MA is very important and the cross of those two curves suggests that the forex market is facing the critical turning point. Comparing two MA, the golden cross emerges when the shorter term MA takes over the longer one upward, while the dead cross seen when taking over downward.

The golden cross or the dead cross suggests the trend up to now ends in and the new one starts from on now.

 

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