Article/Author: Omega Research Inc., 1997

Download: MOV2.ELA

Category: Indicator > Averages

Description:

The moving average may be the most widely used indicator. The Mov Avg 2 line indicator calculates and plots two simple arithmetic averages of the same prices, specified by the Price input, from each of the most recent number of bars specified by the Length inputs. For example, the default setting is to calculate and plot a simple average of the closing prices of the last 9 bars and a simple average of the closing prices of the last 18 bars. The average of shorter length (also known as the fast average) will be more sensitive to current price changes than the average of greater length (also known as the slow average).

Usage:

Moving averages are generally used for trend identification. Attention is given to the direction in which the averages are moving and to the relative position of prices and the averages. Rising moving average values (direction) and prices above the short moving average and the short moving average above the long moving average (position) would indicate an uptrend. Declining moving average va