The practical usage of the 20-day moving average

The 20-day moving average is the moving average with the largest parameters in the short-term moving average system. Compared with the 10-day moving average, the 20-day moving average has 10 more trading days than the 10-day moving average. Therefore, the frequency of change in the operation of the 20-day moving average is much greater than that of the 10-day moving average.

The application of the 20-day moving average in actual combat should pay attention to the following conditions:

First, the 20-day moving average is relatively large due to the selection of cycle parameters, so although it belongs to the category of short-term moving average, it has begun to approach the medium-term moving average. Therefore, in actual combat, when using the 20-day moving average to judge the market trend, we should consider the short-term trend, not just short-term changes, otherwise there will be operational mistakes.

Second, the trend analysis of the 20-day moving average is still that the upward trend represents the short-term trend upward, and the downward trend indicates the downward trend. Therefore, when using the 20-day moving average to analyze the trend, it can also be used to determine the position of market support or pressure, but at the same time, be sure to pay attention to the effectiveness of the 20-day moving average as support or pressure, otherwise it will lead to false stops.

Third, the 20-day moving average will be relatively stable during the operation of the market box, that is, if the fluctuation range of the market is not large, the 20-day moving average may appear close to parallel.