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Strategies & Market Trends : Analysis Class for Beginners

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To: Arthur Tang who wrote (781)	5/4/1998 1:51:00 PM
From: Arthur Tang	Read Replies (1) of 1471

Moving average revisited. Moving average is a value to be compared with the curve in a chart. The longer the number of days are involved the less sensitive to the current trend. Most technical analysts today with the dynamic stock market, preferred to look at shorter than 6 days moving average. If you like to use "right to left" trend lines(most recent two points for each trend line), which is more sensitive than long period trend lines; you can see moving average is not related to current projection of trends. When you try to define breakout and breakdown of moving average against the curve in the chart, the "left to right" trend lines are much more accurate. However, don't forget each day, the trend lines shift over one day, the breakdown might be the new point for the new trend line. And the breakout also may be the new point for the new trend line. The moving average does not shift over. It is just a slight change due to averaging effect. It can assist the determination of breakout or breakdown from trend lines.

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