Moving Average Types
- Moving Average
The Moving Average smooths price data to create a powerful measure of trend direction. Simple, weighted and exponential moving averages are most popular.
- Simple Moving Average
Simple moving averages are easy to construct, but prone to distortion: they tend to "bark twice".
- Exponential Moving Average
Exponential moving averages are more sophisticated than simple moving averages and do not suffer from the same distortions.
- Weighted Moving Average
Weighted moving averages eliminate the distortion common to simple moving averages, but are more difficult to construct than exponential moving averages.
- Wilder Moving Average
Wilder moving averages are used mainly in indicators developed by J. Welles Wilder. Essentially the same as an exponential moving average, they use different weightings, for which users need to make allowance.
- Hull Moving Average
Alan Hull developed Hull Moving Average in 2005 in his quest to create a moving average that is "responsive to current price activity while maintaining curve smoothness". Hull claims that his moving average "almost eliminates lag altogether and manages to improve smoothing at the same time".
- Displaced Moving Average
Displaced Moving Averages are useful for trend-following purposes, reducing the number of whipsaws compared to an equivalent Exponential or Simple Moving Average.
- Moving Average Filters
Filters are employed to reduce the number of whipsaws when using moving average systems.
- Moving Average High/Low/Open
Calculates moving averages using daily, weekly or monthly Highs/Lows/Opens.
- How To Select A Long-Term MA
How to select a long-term moving average to track the primary trend.
Forewarned is Forearmed
Divergences on Twiggs Money Flow give early warning of trend changes, combining price & volume to reflect buying & selling pressure.
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