Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Mike S. who wrote (23811)	2/1/1999 12:32:00 AM
From: Smacs	Respond to of 120523

Mike, Not a stupid question at all! The moving average is based on the average of the last "n" prices of a stock, where "n" is the period being used. For example: A 9 day moving average will take the current days closing price, add it to the sum of the previous 8 days' closing prices and divide it by 9. Tomorrow, the oldest price will be dropped and tomorrow's close will be added to the sum and divided by 9, etc, etc. When the moving average crosses the price graph it's often an indicator of a trend change. If a lower period (such as 3 day) is used, it is more accurate but tends to produce more false signals. A larger period will smooth out the rallies and corrections but tends to delay the indicators resulting in a delayed buy or sell. -smacs-