In the A-share market, investors often use the K-chart for basic technical analysis. There are many moving averages with different periods and colors on the K-line. So what is the moving average? How to use it?

1, what is the average?

Moving average refers to the average calculation of the stock price or market index in the daily cycle, and then connect the average values in the cycle to form a moving average, so as to observe the changing trend of the stock price or market index. It is one of the commonly used technical indicators and usually lags behind the real-time stock price.

Stock trading software usually defaults to 5-day (white line), 10-day (yellow line), 20-day (purple) and 60-day (green line). Investors can add periodic moving averages according to different reference basis, and the system will calculate periodic moving averages according to different periods.

2. Application method (subject to the default indicators)

Under normal circumstances, the stock price is above all periodic moving averages, indicating that the stock trend is in a strong stage and the stock price is in a short-term rising stage. On the contrary, the stock price is below all periodic moving averages, indicating that the stock trend is in a weak stage and the stock price is in a short-term decline stage.

Under normal circumstances, whether it is the 5 th, 10 th, 20 th and 60 th moving averages, there is some support or pressure. The longer the cycle, the greater the support or pressure on the stock price. Investors can make reference transactions by going up or down the moving average, and at the same time, they can judge the trend direction of the stock price.

In short-term trading reference, investors can observe that when the 5-day, 10 and 20-day moving averages slightly cross, the stock price is on the rise, which is a graphical short-term reference buying signal. On the contrary, when the 5-day, 10 and 20-day moving averages slightly cross, the stock price is in a downward trend, which is a graphical short-term rebound selling point signal.

Generally speaking, the moving average is the periodic average price of the stock price, which can be used as a trading reference together with the real-time price of the stock. However, there is no perfect investment method and interpretation method in the investment market, which needs to be combined with other market indicators, market environment and individual stocks for reference.

The stock market is risky, so you need to be cautious in investing.