The Moving Averages in Forex technical analysis, widely used in the stock market to predict the evolution of prices, is also used in the Forex. This analysis is also called chartists because it is based on the charts and analysis of indicators applied to the patterns that prices are formed allows for a wide range of elements of analysis, which we will be detailing in this blog in all the markets buying pressure or selling, is automatically transmitted to prices, and therefore they are constantly subjected to strong variations. These variations are very intense when generating a status of “volatility” of value. A value with a high level of volatility, are abrupt changes in prices, which moved to a chart, you will have large peaks and valleys, that is, introduce the so-called graphic sawtooth. These movements can get to hide the true trend of value, and that will be solved by determining the average mobile. Moving averages are the indicator used in charting.
It is an arithmetic mean that “softens” the price curve becomes a line or curve of the trend, allowing analyzing the start and end. It does not provide trend changes but if you can confirm. 2) simple moving average is a simple average but has the peculiarity 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 deficiency that only takes into account the period over which it computes and attaches equal importance to the first day of the series to last.