What Is a Moving Average Chart?

Moving average, referred to as MA, MA uses statistical analysis to average the securities prices (indexes) over a certain period of time, and connects the averages at different times to form a MA for observing securities. A technical indicator of price movement trends.

Moving average

Moving average ^[1]

Spot, futures, stocks, funds, other derivative financial products.

N-day moving average = sum of N-day closing prices / N

Divided by the length of time, moving averages can be divided into short-term, medium-term, and long-term. Generally, short-term moving averages are 5 days and 10 days; medium-term has 30 days and 65 days; long-term has 200 and 280 days. Can be used singly or in combination. Comprehensive observation of the long, medium and short-term moving averages can judge the multiple trends of the research market. If the three moving averages rise side by side, the market presents

Some characteristics of the moving average are very important for market analysis. We make specific analysis and judgments on 12 of them:

Bulls rise steadily

When the bull market enters a period of steady rise, 10MA, 20MA, 60MA pushes up and to the right, and the three-line bulls are arranged (the order is 10MA, 20MA, 60MA from top to bottom), which are slightly parallel.

Technical backtrack

When the 10MA turned from the upward trend to the lower right, and the 20MA still pushed upward, it revealed that this band is a technical backlash in the bull market, and the rally has not ended.

By idling

When the stock market enters the long market from a short market, the 10MA first crosses the K-line chart from the top down (note the K-line chart), which is below the K-line chart (that is, the stock price stands above 10MA). After a few days, 20MA and 60MA are successive. In order, cross the K-line chart from top to bottom (that is, the stock price stands above 20MA and 60MA in sequence).

Stock consolidation

When the stock price consolidates, 10MA and 20MA are staggered together. If the time is extended, 60MA will also stick together.

High and Low

When the stock price is in the market, if the 10MA advances to the upper right and then breaks up, the market outlook will be higher; if the 10MA decreases to the lower right, the market outlook will necessarily be lower.

Bears come to an end

In the short market, if the 60MA can follow the KMA from top to bottom with the 10MA after the 20MA (the stock price stands above the 60MA), there will be a strong rebound in the market outlook, and even the short market is nearing its end.

Turn from empty

If 20MA turns to the lower right with 10MA, and 60MA also starts to reverse to the lower right, it means that the long market will end and the short market will come.

Below 10MA

When the market turns from a long market to a short market, 10MA first crosses the K-line chart from bottom to top and reaches the top of the K-line chart (the stock price falls below 10MA). After a few days, 30MA and 60MA successively cross K from bottom to top. Line chart, reach the top of the K-line chart.

In order

The short market moving averages are above the K-line chart, and the order of arrangement is 60MA, 20MA, 10MA from top to bottom.

The rebound started

In the short market, if the mobile 10MA first crosses the K-line chart from top to bottom (K-line chart is above, 10MA is below), the stock price stands above 10MA, which is a precursor to the rebound of the stock price in the short market.

Increased rebound trend

In the short market, if the 20MA also crosses the K-line chart from top to bottom after the 10MA, and the 10MA is above the 20MA (both the stock price stands above the 20MA and the 10MA and 20MA bulls are arranged in a row), the rebound trend will become stronger.

Deep back

If 20MA turns to the lower right with 10MA, and 60MA still pushes up to the right, it reveals that this band is a deep rebound in the long market. Correspond to the strategy of holding the currency to watch or short.

The 120-day moving average is also known as the "semi-annual line". Since it is a "semi-annual line", what will happen to the market after half a year? Obviously there are more issues to consider in the application of the 120-day moving average.

Then the use of the 120-day moving average in actual combat can pay attention to two aspects:

One is that the fluctuation range in the actual trend will not be too large, it will suppress the market trend in a bear market; it will support the market trend in a bull market.

Second, the change of direction should generally be combined with wave analysis for its effectiveness to be reliable.

1. In the rising market, the stock price fell from the top to the bottom of the 10-day moving average, which means that the short-term market has turned short. You should sell the stock, wait and see, and wait for the opportunity again.

2. After falling below the 10-day moving average, the stock price fell below the 30-day and 60-day moving averages in sequence. These two signals remind investors that the stock price will have a deeper decline soon, which is an excellent time to sell . The 30-day moving average is the lifeline of the stock market, and the 60-day moving average is a medium-term indicator. The stock price falling below this second line indicates the beginning of the medium-term decline. If the stock in the investor's hands still has profits, it should be firmly thrown away; Should also come out decisively.

3 In the long market, the stock price fell below the 10-day moving average, and the 30-day moving average is still rising at the upper right below the K-line chart, indicating that it is a technical rebound in the long market. The decline should not be too deep. High, or sell the stock first when the stock price falls below the 10-day moving average and wait for the opportunity to buy.

4 If the stock price falls below the 10-day moving average and then falls below the 30-day moving average, and the 30-day moving average moves to the lower right, it means that the decline will be deeper. You should sell the stock and wait and see.

5. For example, after the stock price fell below the 10- and 30-day moving averages, it fell below the 60-day moving average, and the 60-day moving average also moved to the lower right. Look for better opportunities.

6. If the stock price falls below the 10-, 30-, and 60-day moving averages in turn, and the three lines are arranged in parallel short positions, it means that the short market is coming, and the short side has an absolute advantage. The short-term decline will deepen day by day and should be sold. Dropping all stocks reduces losses and saves strength to make up at a lower price.

7. In the long-term market, if the 10-day moving average breaks down to the right, it indicates that the strength of the shorts will increase, and the market outlook will continue to fall. This is the time to sell. This is very applicable to the Shanghai stock market, which must fall for a long time.

8. The stock price runs near the 10-day moving average. If the distance between the stock price and the 10-day moving average suddenly increases, it means that the bulls are exhausted and the short power is strengthened. There will be a sharp downward trend in the market and the stocks should be sold immediately.

The 9.10-day moving average is entangled with the stock price, and it is not easy to rise and fall sharply. At this time, you should wait and see and watch it change. When the 10-day moving average moves away from the stock price and moves to the lower right, the market outlook will fall more deeply, which is the time to sell.

10 When the 60-day moving average turns from an uptrend to a flat, or a downward turn to the right, it is the time to sell. Once the turning point of the 60-day moving average appears, it usually indicates that there will be a period of intermediate rise or fall in the market. Many investors and experts attach great importance to the 60-day moving average.

1. In the operation of stock market, we must first pay attention to the arrangement of moving averages, and we must distinguish what is the long arrangement of moving averages. For example, if the short-term moving average is above, the medium-term moving average is centered, the long-term moving average is below, and several moving averages are slowly diverging upward at the same time, it is called a moving average long position. The long line of the moving average system indicates that multiple parties control the situation, and the operation can be viewed as a higher line. At this time, investors should mainly be long. However, it should be noted that when the stock price rises, it deviates too much from the moving average. According to the Granville moving average rule, a short-term decline will occur. Can increase profit opportunities. Conversely, if the long-term moving average is above, the medium-term moving average is at the center, the short-term moving average is at the bottom, and several moving averages slowly diverge downward at the same time, it is called a moving average short position. The short line of the moving average system indicates that the short side is controlling the situation and the market is weakening. At this time, investors should mainly short. However, it should be noted that when the stock price falls too far from the moving average, using the Granville moving average rule, there will be a short-term upswing opportunity. If you are accurate, grab some chips and make a wave of rebound to increase the funds. Utilization. Do it occasionally.

2. The forecast of short-term trends should be based on the research and judgment of the 5th and 10th moving averages. In a strong market, or in a strong stock, a decline in the stock price (index) generally does not fall below the 5-day moving average, nor does it fall below the 10-day moving average. Weakened. In weak markets, or in vulnerable stocks, the stock price (index) rebound generally does not break through the 5-day moving average, nor does it break through the 10-day moving average. If it breaks through the 5-day moving average, especially the 10-day moving average, it may turn strong. Investors need to note that the so-called breakout here should be based on a decline of more than 3%, and for more than 3 consecutive days.

3. The forecast of the medium-term trend should be based on the 30-day and 60-day moving averages. Judging from the operation of the Shanghai and Shenzhen stock markets for several years, the 30-day moving average has always been an important indicator of the strength of the market in the medium term. When the stock price (index) falls, the 30-day moving average is effectively broken, and the medium-term trend is bearish; when the stock index rises, the 30-day moving average is effectively broken, and the medium-term trend is optimistic. In terms of the reliability of the medium-term trading signals, the 60-day moving average is better than the 30-day moving average (because the 60-day moving average is less deceiving than the 30-day moving average). The 60-day moving average has a significant impact on the short- and medium-term stock price trend. To help the decline, when the 60-day moving average is stronger or the stock price (index) stands above the 60-day moving average, the upward trend is clear at a glance. Some people have investigated that in the history of the Shanghai stock market, every time the 60-day moving average breaks up, it triggers a round of intermediate market. On the contrary, the weak rebound hardly exceeds the 60-day moving average. Therefore, when deciding when to buy and when to sell, midline buyers must not forget the guiding role of the 30-day moving average and the 60-day moving average.

4. The prediction of the medium and long-term trend should be based on the 120-day moving average. From

1. Moving average dragons go to sea and guillotine

market

Moving average and stock market

No matter the short-term moving average, medium-term moving average, or long-term moving average, its essential meaning is to reflect the average cost of different periods of market prices. Some market participants believe that the main force can arbitrarily disrupt various moving averages. I believe that this kind of understanding ignores the true meaning of the "average cost" of the moving average, because it will pay extra costs to arbitrarily disrupt the planned moving average cost. The 60-day moving average series is a long-term moving average technology, that is, there are 120-day moving average and 250-day moving average after the 60-day moving average. In fact, the battle applications are all difficult and demanding technology types, mainly because such moving averages have large cycle costs. Line, reflecting that the analysis of the market is no longer a local change, but requires analysis of changes in the overall market trend. The use of the 120-day moving average in actual combat can be noted in two aspects. One is the fluctuation range of the 120-day moving average in the actual trend. It will not be too big, it will suppress the market trend in a bear market; it will support the market trend in a bull market. Second, the direction of the 120-day moving average should generally be combined with megatrend analysis for its validity to be reliable. Take the ten-day moving average as an example. Divide the sum of the 10 closing prices from the 1st to the 10th by the cumulative total divided by 10 to get the first 10-day average price, and then divide the closing prices from the 2nd to the 11th by 10, then For the second 10-day average price, the connection of these average prices becomes the 10-day moving average. The duration of the moving average is related to its sensitivity. The shorter the period, the higher the sensitivity. Generally, stock analysts usually use 6 And 10-day moving averages to observe short-term trends, and 10- and 20-day moving averages to observe short-term and short-term trends; 30- and 72-day moving averages to observe medium-term trends; and 13- and 26-week moving averages to study long-term trends trend. Western investment institutions value the 200-day long-term moving average as a basis for long-term investment. If the market price is below the long-term moving average, it is a short market; otherwise, it is a long market.

Moving average performance

The average line has changed from falling to horizontal, and there are signs of changing the direction of movement to the upper right, while the stock price mostly stabilizes or rebounds upward. When the average line continues to run upward, the stock price will mostly go up simultaneously. Although it fell back, it still kept moving upwards. The trend of the average line has gradually changed from an upward trend to a trading situation, showing that the stock price is already quite high, and the stock price has been accompanied by a fall. The moving average is in a downward trend. Most of the stock prices have fallen. Sometimes after the stock price falls, it rebounds, or rises to the vicinity of the moving average, but it will soon be in a downward state.

In particular, the medium- and long-term moving averages are in line with the direction of the stock price, and in a market environment with a long position, the stock price rose at this time.

In actual combat, the vast majority of stocks going against the current trend are not ideal. These stocks have all experienced short-term skyrocketing in the case of the "down" of the long-term moving average, but this does not mean that the analysis of the moving average is wrong. This is another phenomenon of the moving average-"average moving". This situation is an event with a small probability and is not universal. After all, the probability of such a stock being less than 1% cannot be reached. It is only normal that there are more than 1,000 stocks per year, which is not a common phenomenon.

Moving average

When the moving average is used in actual combat, the advantages and disadvantages of the moving average must first be clarified. The advantage is that it allows investors to take advantage of the trend and the disadvantage is that it is more difficult to grasp in a volatile market. Taking full advantage of the advantages of the moving average, it can well grasp market opportunities in the rising market of the unilateral market, and can well avoid market risks in the falling market of the unilateral market. This is like when the boat is sailing along the water, the engine provides sufficient power plus the power of the water under the impact of the current, and the boat will travel very easily. In actual combat, the stock price of a stock is equivalent to a boat, and the moving average is equivalent to water. When the direction of the medium-term and long-term moving average is the same as the direction of the stock price, perform the corresponding direction operation. The power of) is very significant in actual combat, and can help you better grasp market opportunities and avoid market risks. Therefore, the "average line is in the same direction as the stock price. In the case of a" long position ", value stocks with active trading volume are good stocks to focus on. If you can understand it deeply, grasp it, and use it skillfully, your wealth will follow.

Use moving average combinations to seize market opportunities. When using a combination of two moving averages, a moving average with fewer days rises above a moving average with more days as a buy signal, while a moving average with more days falls below a sell signal. The advantage of a moving average is that it can identify long-term trends. When the moving average is developing to its own advantage, you can continue to hold stocks until the moving average turns around and then close the position. You can get huge profits. The moving average is not good for yourself. It can be thrown out as early as possible in order to minimize risks. The short-term moving average can be taken to 3-5 days, the medium-term can be taken to 12 days, the long-term to take one month, and the super long is more than two months.