{"id":21554,"date":"2011-06-07T19:12:33","date_gmt":"2011-06-07T23:12:33","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=21554"},"modified":"2011-06-07T19:12:33","modified_gmt":"2011-06-07T23:12:33","slug":"the-trend-is-your-friend-how-moving-averages-can-improve-your-market-analysis","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/06\/07\/the-trend-is-your-friend-how-moving-averages-can-improve-your-market-analysis\/","title":{"rendered":"The Trend Is Your Friend: How Moving Averages Can Improve Your Market Analysis"},"content":{"rendered":"<h3><span style=\"font-size: small;\">By Elliott Wave International<\/span><\/h3>\n<p>Many traders and investors use technical indicators to support                     their analysis. One of the most popular and reliable also                     happens to be an indicator that has been around for years                     and years &#8212; moving averages.<\/p>\n<p>A moving average is simply the average value of data over                     a specific time period. Analysts use it to figure out whether                     the price of a stock or a commodity is trending up or down.                     It effectively &#8220;smooths out&#8221; the daily fluctuations                     to provide a more objective way to view a market.<\/p>\n<p>Although simple to construct, moving averages are dynamic                     tools, because you can choose which data points and time                     periods to use to build them. For instance, you can choose                     to use the open, high, low, close or midpoint of a trading                     range and then study that moving average over a time period,                     from tick data to monthly price data or longer.<\/p>\n<p>Moving Averages can help you identify the trend in a market,                     which is important since we all know that <em>the trend is                     your friend<\/em>. Yet certain moving averages can serve as                     support or resistance, and also alert you to trading opportunities.<\/p>\n<p>This excerpt from EWI Senior Analyst Jeffrey Kennedy&#8217;s free                     eBook, How You Can Find High-Probability Trading Opportunities                     Using Moving Averages, shows how a popular moving average                     setting identified trading opportunities in the stock of                     Johnson &amp; Johnson. <strong><span style=\"text-decoration: underline;\"><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa185&amp;dy=aa060311&amp;url=http:\/\/www.elliottwave.com\/club\/moving-averages\/default.aspx?code=45754%26articleid=2257\">Download                     the full 10-page eBook here<\/a><\/span>.<\/strong><\/p>\n<blockquote><p>A popular moving average setting that many people work                       with is the 13- and the 26-period moving averages in tandem.                       The figure below shows a crossover system, using a 13-week                       and a 26-week simple moving average of the close on a 2004                       stock chart of Johnson &amp; Johnson. Obviously, the number                       26 is two times 13.<\/p><\/blockquote>\n<p><img decoding=\"async\" src=\"http:\/\/www.elliottwave.com\/images\/freeupdates\/Image\/Figure%202-5.jpg\" border=\"0\" alt=\"\" vspace=\"15\" \/><\/p>\n<p>During this four-year period, the range in this stock was                     a little over $20.00, which is not much price appreciation.                     This dual moving average system worked well in a relatively                     bad market by identifying a number of buyside and sellside                     trading opportunities.<\/p>\n<p>Learn to apply Moving Averages to your trading and investing                     by downloading Jeffrey Kennedy&#8217;s free 10-page eBook. <strong>Here&#8217;s                       what you&#8217;ll learn:<\/strong><\/p>\n<ul type=\"disc\">\n<li>How to apply the <strong>three most popular moving average                     techniques.<\/strong><\/li>\n<li>How to decide <strong>which moving average parameters                         are best<\/strong> for <strong>the markets and time frames                         you trade.<\/strong><\/li>\n<li>How to <strong>avoid several common<\/strong><em><strong> but                           dangerous<\/strong><\/em> <strong>myths<\/strong> about                           moving averages.<\/li>\n<\/ul>\n<p><span style=\"text-decoration: underline;\"><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa185&amp;dy=aa060311&amp;url=http:\/\/www.elliottwave.com\/club\/moving-averages\/default.aspx?code=45754%26articleid=2257\">Download                     How You Can Find High-Probability Trading Opportunities Using                     Moving Averages now<\/a>.<\/span><\/p>\n<div>\n<p><em>This                     article was syndicated by Elliott Wave International and                     was originally published under the headline <span style=\"text-decoration: underline;\"><a href=\"http:\/\/www.elliottwave.com\/r.asp?acn=9cp&amp;rcn=aa185&amp;dy=aa060311&amp;url=http:\/\/www.elliottwave.com\/freeupdates\/archives\/2011\/06\/03\/The-Trend-Is-Your-Friend-How-Moving-Averages-Can-Improve-Your-Market-Analysis.aspx%26articleid=2257\"><strong>The Trend Is Your Friend: How Moving Averages Can Improve Your Market Analysis<\/strong><\/a>.<\/span> EWI is the world&#8217;s largest market forecasting firm. Its staff                     of full-time analysts led by Chartered Market Technician                     Robert Prechter provides 24-hour-a-day market analysis to                 institutional and private investors around the world.<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Many traders and investors use technical indicators to support their analysis. One of the most popular and reliable also happens to be an indicator that has been around for years and years &#8212; moving averages.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-21554","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/21554","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=21554"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/21554\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=21554"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=21554"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=21554"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}