Moving Average, ano nga ba ito at para san ito?
Sa tagalog, Galawang Hokage (Aking Sariling Version-Walang basagan ng trip) LOL!!!
But seriously, this is the indicator we normally use to see the current trend of the market (Oooops Tagalog nga pala).
OK, ganito yan:
Given the following series of prices:
$9, $10, $11, $12, $13, $14, $15, $16, $17, $18, $19, $20
The SMA calculation would look like this:
$9, $10, $11, $12, $13, $14, $15, $16, $17, $18, $19, $20 = $174
12-period SMA = $174/12 = $14.5
This is what you call, SMA or Simple Moving Average. Baket naging Simple? Aba'y malay ko, tanong naten sa nagimbento--Peace! Well, as we can see it's just adding them all and getting the average; isn't that simple (Divide by the total numbers of given units).
While EMA, is the Exponential Moving Average. With the formula of:
Ano bored kanaba?! Kahet naman ako aantukin sa pag analyze ng mga formulas na yan!
The truth is, we are not here to discuss the actual how to compute these two (2) kinds of moving average. Our aim is to know how to properly use them and which is suitable for you!
Ganito kase yan! First, you have to answer and be true to yourself; sa tanong na anong klaseng trader/investor kaba? Again, uulitin ko--HINDI ko tinatananong kung anong gusto mong maging klase ng trader! It goes like this, what kind of person and character you have? Dahil in the end, babalik padin tau sa kung saan tau komportablbe in english our "Comfort Zone". Kaya kung ikaw ay tamad, sa ayaw mo man aminin o hindi at ang gusto mo ay relax lang dapat ikaw ay nasa kategorya ng Investor/Position Trader (Long-Term) at kung ikaw naman ay malikot at di mapakali at laging kating-kati. Aba'y ikaw marahil ay magiging Scalper/Day Trader (Shorter Time Frame). Or ikaw ay isang Swing Trader-Weekly Basis generally speaking--don't boxed it and open your mind (Technically incline but you don't have enough time to spend all day on trading), this is the best for you.
Now that somehow we're able to cleared that part; we can now answer the question "How and Which of these MA's you should focus on?
SMA, are for more relax trading setup, it means you are going on a longer time frame. Where you need to see things and safely manage your risk. Downside: You may miss the flight or on dropping down the game, it means lesser earnings.
EMA, is for faster and riskier trade. Where you need to see every action (Higher Reward). Downside: You can easily tap out of the game, especially if you have Stop-Loss (Higher Rewards means Higher Risk).
On the next blog we'll try to discuss what DIGIT(s) to set on these Moving Averages and the Time Frame must have...
Additional Topics, with regards to my sample TA's
https://steemit.com/btc/@henrymac/ta-samples-and-comments-on-the-sideline
Ref: https://www.investopedia.com/articles/trading/10/simple-exponential-moving-averages-compare.asp
Ref: http://lapensinemutine.eklablog.com/la-musique-plus-efficace-que-les-medicaments-dans-la-secretion-d-analg-a118746744
Don't forget to "UPVOTE" and Follow @ https://steemit.com/@henrymac
