Let's first understand the deviation principle of the moving average. The deviation rate of moving average is measured by calculating the percentage difference between futures price and its moving average. Moving average refers to a plane grid in a period of time, which can be either a simple moving average (A) or an exponential moving average (EMA). The percentage difference between the price and the moving average is called the deviation rate of the moving average, which can show the degree of deviation between the price and the moving average, and then reflect the overbought and oversold situation in the market.
The calculation method of moving average deviation rate is relatively simple. We need to choose a suitable average duration, which is generally 10 day, 20 days, 30 days, etc. Calculate the difference between the futures price and the moving average, that is, the current price MINUS the moving average price. Divide the difference by the EMA price and multiply it by 100 to get the percentage of EMA deviation.
The deviation rate of moving average can help investors to judge the trend of futures prices and make corresponding trading decisions. When the price is higher than the moving average and the deviation rate is large, it means that the market is overbought and investors can consider selling futures; On the contrary, when the price is lower than the moving average and the deviation rate is large, it means that the market is oversold and investors can consider buying futures. At the same time, the change of deviation rate can also be used to confirm the continuation or inflection point of price trend, and further guide investors' operating strategies.
The application of moving average deviation rate is illustrated with examples. Suppose that the average period of A futures is 20 days, the current price is 1000 yuan, and the average period of 20 days is 950 yuan. The calculated deviation rate is 5.26% ((1000-950)/950 *100). If this deviation rate exceeds the average level of the market, it can be judged that the market may be overbought, and investors can consider selling futures. If the deviation rate is lower than the market average, it can be judged that the market may oversold, and investors can consider buying futures.
The deviation rate of the moving average is not perfect. It is only an auxiliary tool and needs to be used together with other technical indicators and market judgments. Investors should also pay attention to the special situation of the market and the characteristics of individual stocks when using the deviation rate of the moving average, so as to avoid blindly following the indicators and leading to wrong trading decisions.
To sum up, the average deviation rate is a technical index to measure the degree of deviation between futures prices and their average. By calculating the difference between price and moving average and converting it into percentage, investors can judge the overbought and oversold situation in the market and make corresponding trading decisions. When investors use the deviation rate of the moving average, they need to make a comprehensive judgment based on other indicators and market conditions to avoid blindly following the indicators and leading to wrong trading decisions.