**Moving Average Indicator (MA) **is the

The Moving Averages come in four variations:

**SMA &8211; Simple moving average**, which plots the arithmetic mean of the prices**EMA &8211; Exponential moving average**, which plots the average price but more weightage given to the latest price**SMA &8211; Smoothed moving average**, is calculated as the simple moving average, divided by the look back period**LWMA &8211; Linear Weighted moving average**basis its calculation similar to the smoothed moving average but with more weightage given to the latest prices

The **moving average** forms the basis of many trading systems and strategies with the most common being using a longer term and a short term moving average. When the short term moving average cuts above the longer term moving average from below, a long signal is established and when the short term moving average cuts below the longer term moving average, a short signal is triggered. The standard moving averages include 200, 100, 50 and 20 day moving averages on the daily charts, although traders can set up a moving average for any period of their choice.

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