Subject: Moving averages - MA

Subject: Moving averages – MA

Over the past decades, traders and researchers have tirelessly sought to find a reliable method of predicting the future behavior of the asset. As a result, we have a lot of different methods of fundamental and technical analysis and a lot of theories that really work. First, I want to discuss a very popular method of technical analysis.

Technical analysis is a generally accepted method of assessing assets and determining the future direction of the price through the use of graphical patterns and mathematical indicators, or a combination of them. Many believe that this is the most reliable way to find out how demand and supply will change and what are the latest decisions taken by market participants. In fact, most market traders prefer to use technical indicators to confirm existing graphical patterns or trading opportunities.

Sometimes indicators do not work as well as we would like, predicting or confirming the direction of the market. It’s not because they are absolutely useless and not because You read them the wrong way. Just sometimes the market condition is not suitable for a particular indicator. This means That you cannot use the trend indicator on the side market and Vice versa.

In addition, sometimes the signals of different technical indicators conflict with each other and it is not easy to choose the correct interpretation of the opportunities provided by each of them. This is due to the properties of each indicator and this result often means “wrong setup”. It should be taken for granted that no indicator will always show you the right trading signals. So I think it is vital for traders to understand the nature of indicators and effectively avoid their noises.