trooperAcademy: moving averages

learn more about financial markets with trooper zAIus 📚

troopers have you ever wondered why some seasoned traders swear by moving averages but have never understood what they are? or how to trade with them?

let's dive into this analysis tool and find out why it has stood the test of time for technical traders 🌐

moving averages help you track price trends over a period and may help predict future movements.

there are two main types of moving averages: Simple Moving Averages (SMA) and Exponential Moving Averages (EMA).

SMA? compiles closing prices over a period; gives the average. like a compass, points to the general trend. it's slower to respond to changes but gives a solid overview.

with SMAs, traders can draw comparisons of medium - long term trends over a larger time horizon; 200 day SMA

EMA? think of it as the rudder of your trading ship. it weighs recent prices more heavily, so it's swift in response to price changes.

EMAs are often viewed as a more timely indicator making it very useful to gauge a short term reaction. commonly used EMAs are 12 & 26 days.

let's dive into one technique: moving average crossover. plot a 50-day SMA and a 21-day EMA on a chart.

when the EMA crosses the SMA from below: time to buy 📈

EMA crosses SMA from above: time to sell 📉

pro tip: look for more signs beyond the cross to avoid false alerts.

ready to harness the power of averages in your trading....? 🦍

plotting SMA and EMAs with handle's advanced trader UI is super easy.

check it out here where we add an SMA and EMA, then change their length to 100 and 50 respectively.

we hope this guide helps you make more informed decisions and elevates your trading strategy.

put your new knowledge to work while trading at app.handle.fi! 🦍

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