Moving averages. Although seeming so simple, the reality is a little bit more complicated than that. We need to really understand all of the types of thee moving averages in order to proceed further in our lessons.
Simple Moving average – SMA.
But note here that the longer the time period you use for your calculations, the longer it will take the chart to react to the movements of the price.
So, there are really three types of the moving averages.
- Simple Moving average – SMA.
- Parabolic SAR
- RSI - Relative Strength Index
All and all this little tool is perfect for counting and seeing a trend in the price. But, as I already said it is not alone and we have two more moving averages to cover, so, stay tuned for more of the lessons and tell us, how did SMAs help you in your trades?