The moving average period represents the length of the trend

The moving average direction represents the bull and bear trend of the trend

The angle of the moving average represents the amount of support or pressure

The extended meaning of the moving average

The role of the moving average

Since the price of commodities is volatile, simply observing the daily price movement

The trend is usually disturbed because the price fluctuation range is too large, and its essence cannot be seen

. Therefore, after setting the price as a moving average, the price can have a leveling effect in the presentation, allowing for observation and analysis.

Trend line

The price after the leveling effect has a clearer direction, that is, more observation samples can reveal it. The long-term trend of prices. Therefore, the moving average can be considered a trend line.

Cost Line

Since the moving average is calculated by considering the closing prices of the last N trading days

, therefore, generally speaking, moving The average is the average price of market transactions in the last N trading days

. That is to say, in the last N trading days, the costs of buyers and sellers in the market will be near the moving average. Therefore, the moving average can be regarded as the average cost line of market buyers in the recent period.

Support and pressure?

From a psychological perspective, the moving average is at a specific price, which means that

this price is the current financial product. The holder's average cost area, and for investors, this price is a price worth buying. Therefore, when the price falls from up

to near the moving average, it will Then it reaches a price area that investors think is worth buying, which triggers buying actions. Therefore, the moving average can be regarded as a support line. On the other hand, when the external environment makes the support of the moving average insufficient and the price falls below the moving average, arbitrage will occur. Phenomenon, at this time, investors will have a mentality that when the price returns to the purchase cost, they will quickly sell the financial product to unwind. Therefore,

When the price rises from bottom to top and rises near the moving average, selling pressure will occur

and limit the price's rise. Therefore, at this time, the moving average becomes a pressure line instead.

Basic rules for judging moving averages

Grand Bi’s eight rules

Golden Cross and Death Cross

How moving averages are arranged

Changes in the rising angle of the moving average

The size of the opening of the moving average

The bucking position of the moving average

The departure (divergence) of the moving average

Convergence and Divergence of Moving Averages

The above is from my lecture notes