Big Boobs Milk Feeling

Momentum indicators Moving Average EMA

1) Introduction

often in stock markets and futures buying or selling pressure is automatically transmitted to prices, and therefore they are constantly subjected to abrupt changes. These variations are called by "volatility" of value. A value with a high level of volatility, make abrupt changes in prices, which translated to a chart, have large peaks and valleys, ie the graph presented called "sawtooth" . These movements can not hide the true trend of value and that will be solved by determining the moving average.
Moving averages are the most widely used indicator charting analysis. It is an arithmetic average "smooths" the curve price and becomes a line or curve of the trend, allowing analyzing its beginning and its end. It does not provide trend changes but if you can confirm.

2) simple moving average

half is simple but has the particularity that each day that passes, it eliminates the first day of the series in the calculation and added the last day. For the purposes of analysis presents the criticism that only takes into account the reporting period is calculated, and gives equal weight to the first day of the series to last.

3) Weighted Moving Average

corrects the second critical

previous because it gives more weight to recent prices, so that the latest prices have more influence than the former.

4) Exponential Moving Average

serves to eliminate the first criticism, and that includes all historical data, applying an exponential weighting (the exponential average of the first day is the end of that day .)
This average assigns more weight to the nearest closing prices and downplays closing prices further away.

The formula is:

Media Media today = yesterday + (Close today - Media yesterday) x (2 / n +1)

view graphs of the various contributions, will have the following situation:

1. - Signal to buy:

will occur when the moving average is crossed by the price up.

2. - Signal to Sell:

will occur when the moving average is crossed down prices.

5) Considerations

They ask the following considerations:

An important fact is that the moving average change its curvature, and if the period being analyzed is too short, there may be signs "False" (which can be avoided by using "filters"), and if the period is too long analyzing the signals to buy or sell will occur too late.
Another use of moving averages is that they represent support and resistance on the chart, taking into account that the larger the number of contacts, this is more optimized moving average.
To avoid the problems discussed above, it is advisable to use the combination of moving averages, ie, a long moving average to follow the trend of long-term market, and a short moving average for detecting short-term movements.
A widely used system is called "method double cross "also points to the time of purchase or sale. The method is as follows:

Buy Signal:

occurs when the short moving average crosses from below upwards long moving average.

signal Sale:

occurs when the short moving average crosses from above to below the long moving average. This method may delay the entry or exit, but significantly reduces the number of false signals that may occur.
There is also a third method called "Method of the neutral zone, which consists of buying when the price is above both moving averages, and sell when the price is in the middle of the two moving averages.