HYCM foreign exchange moving average, a good helper for judging market trends

A moving average is a technical analysis tool commonly used to capture market trendshycmIn the actual operation of foreign exchange, the N-day moving average is calculated from the mathematical average of the closing prices of the past N days. Each day passes, the closing price of the furthest day is removed and the closing price of the most recent day is included in the recalculation. These averages are connected in a straight line to form a moving average.

buy signal

1. When the average gradually shifts from falling to flattening or rising, and the price breaks through the average from below the average.

2. When the price falls below the average line, it quickly rises above the average line, and the average line continues to rise.

3. When the price trend line is above the average, the price decreases but does not fall below the average line, and then reverses upward.

4. When prices suddenly plunge, falling below and away from the average, a rebound may follow.

sell signal

5. When the average gradually shifts from rising to flattening or falling, and prices fall below the average.

6. When the price breaks through the average line upwards, it quickly falls back below the average line, and the average line continues to decline.

7. When the price trend line is below the average, the price rises but fails to break through the average, and then reverses the decline.

8. When prices suddenly spike, they break through the average and move away from it, followed by a pullback.

The use of moving average combinations

Take the 5-day, 10-day, and 20-day moving average combinations as an example:

1. In the early stages of an upswing, a cross formed by a short-term moving average crossing a mid- to long-term moving average is called a golden cross, which usually indicates that the price will strengthen.

2. When the short-term moving average crosses the mid- to long-term moving average from the top down, a cross is called a death cross, which usually indicates that the price will weaken.

3. When the rising market enters a stable period, the 5-day, 12-day, and 60-day moving averages are arranged in sequence from top to bottom, moving to the top right. This pattern is called a bullish arrangement, which generally indicates that prices will rise sharply.

4. In a falling market, the 5-day, 12-day, and 60-day moving averages are arranged in sequence from bottom to top, moving to the bottom right. This pattern is called a bear arrangement, which generally indicates that the price will fall sharply.

Resistance effect of multiple averages

In an uptrend, the price is above the moving average, and the bullish moving average can be regarded as a defensive line for many parties. When the price pulls back to the vicinity of the moving average, each moving average will generate support in turn, and buying will push the price up again. This is the role of the moving average.

* Note: If the order of the above three lines remains unchanged, the boosting effect is obvious; if the order changes, it may be reversed.