![]() Most notable are the Simple Moving Average (SMA), the Exponential Moving Average (EMA), the Weighted Moving Average (WMA) and the Hull Moving Average (HMA). The 21 period is the control and the 10 period is the faster acting moving average. ![]() The 50 period acts as the longer term moving average. In the example below we are using the 10, 21 and 50 period exponential moving averages. There are different types of Moving Averages which all take the same basic premise and add a variation. When using the triple EMA crossover strategy you are adding three EMA’s to your chart. In fact, Moving Averages form the basis of several other well-known technical analysis tools such as the Bollinger Bands and the MACD. Because a Moving Average is a lagging indicator and reacts to events that have already happened, it is not used as a predictive indicator but as an interpretive one for confirmations and analysis. Noise is made up of fluctuations of both price and volume. ![]() Simple moving averages (SMAs) are an average of prices over the specified timeframe, while exponential moving averages (EMAs) give more weight to recent prices. Essentially, Moving Averages smooth out the “noise” when trying to interpret charts. The two most popular types of moving averages are the simple moving average (SMA) and the exponential moving average (EMA). A Moving Average is a good way to gauge momentum as well as to confirm trends, and define areas of support and resistance. Moving Averages are price based, lagging (or reactive) indicators that display the average price of a security over a set period of time.
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