Noise annoys: How moving averages can help

摘要

Moving averages cut through the chatter, smoothing out insignificant short-term price fluctuations and highlighting what really matters: the short-, intermediate-or long-term trend. Here, we look at the basics of how to calculate moving averages, how to apply them and how to modify them. Sometimes, it's hard to see where the market is headed. It drives higher, only to fall back. Price might careen wildly sideways, ultimately ending several points higher or lower. Amid such madness, while markets churn and spike, retreat and recover, it's difficult to determine the bias behind the moves. Is it bullish or bearish? And to what degree? The goal is to smooth out the surges and corrections, to eliminate the noise. The answer, for many traders, is a moving average of price.