Moving Averages

“Attempting to eliminate market noise”

Moving averages are a very simple and effective tool for identifying trends. They are “lagging” indicators as the averages take data from previous time periods. The reason they are called moving averages is because they take the average of the last “x” periods, for example a moving average of the last 50 days. There are two main types; Simple Moving Averages (SMAs) and Exponential Moving Averages (EMAs). This article will go into both and how it relates to other indicators such as the MACD indicator (article here).