Moving Average Trend Tracking Practical Methods

Looking at the K-line chart, investors must first have a preliminary understanding of the moving average. Take the 5-day moving average in the daily chart as an example. "Average" refers to the arithmetic average of the closing price in the last 5 days. "Moving" refers to the selection of the closing price data is always the closing price of the last 5 days, and moves forward day by day in the calculation. 1. The role of small and medium parameters in the moving average system is mainly to see the channel

Taking the daily line as an example, the 5-day, 10-day, 20-day, and 30-day moving averages are the parameters of the moving average system commonly used by most investors. Observing the direction of the channel formed by these averages is crucial to investors' decision-making. The operation focuses on grasping the trend. The channel describes the direction of the trend. Currencies holding an upward channel will make profits over time, and currencies holding a downward channel will lose money over time.

In the standard rising channel, the daily K line is above the 5-day moving average, the 5-day moving average is above the 10-day moving average, and the 10-day moving average is above the 20-day moving average. This is what we often talk about. The market decline is supported by the moving average system; while in the standard falling channel, the opposite is true, that is, the market rise we often talk about is suppressed by the moving average system. for through CXMForex PlatformFor investors who operate, understanding these channel directions is very helpful for timing entry and exit.

2. The function of large parameters in a moving average system is mainly to see pressure and support

Large parameters are usually used effectively in Fibonacci numbers such as 55, 89, 144, 233 and other numbers such as 72, 113, 187, 288, 384, 576, 748. These large parameters mathematically imply the principle of the time window and the golden section, and are also where the market average cost and turnover of large time periods in the market are piled up. It is normal market behavior for the overall trend to cross, pause or turn at these large moving averages, and the pressure and support of large parameter moving averages are also generated.

This also provides a basis for investors to buy dips and sell dips. It is worth mentioning that the above parameters are valid for monthly, weekly, daily, 60-minute, 30-minute, 15-minute, and 5-minute moving average settings.

3. Moving averages grasp the trend and pay attention to looking long and short

Only after seeing the monthly and weekly trends clearly can we make a correct judgment on the current market. In order to make the right choice among the three operation strategies of entering, waiting and exiting. And accordingly formulate long-term, medium-term, short-term shareholding or currency holding plans.

The true sense of buying and buying timing is completed on the small dots of the daily line, 60-minute line, 30-minute line, 15-minute line, and 5-minute line, which can maximize profits and reduce costs. This is to look long and short. More than 80% of investors in the market only look at the daily K line, and the one-sidedness and blindness resulting from this operation are obvious.

4. The moving average follows the trend with a lag, and its trend change starts with the change of the K-line

Taking the daily line as an example, the trend change of a currency in an upward channel initially begins with the K-line falling below the 5-day moving average, falling below the 10-day moving average, falling below the 20-day moving average, and falling below the 30-day moving average, driving the 5-day moving average to cross the 10-day moving average, the 5-day moving average to cross the 20-day moving average, and the 10-day moving average to cross the 20-day moving average, etc. The fork of the price difference initially begins with the change of the K-line, and investors should pay high attention.