1. What's the average?
The moving average is the average value of price changes, and the line formed by connecting multiple price points with a continuous line is the moving average. The moving average is a trend line, which is characterized by smoothness and can accurately reflect the long-term trend of the stock market and the average level of historical prices. EMA is widely used in stock, futures, foreign exchange, digital currency and other trading markets, and is one of the basic tools for traders to analyze the market. According to the number of days of average statistics, it can be divided into short-term average, medium-term average and long-term average.
2. Calculation method of five-day moving average
The five-day moving average refers to the sum of the closing prices of the past five trading days divided by five. This moving average is one of the most commonly used short-term moving averages, because it can quickly reflect the current fluctuation trend of stock prices. It should be noted that the calculation of the five-day moving average is dynamic, and the daily closing price will have an impact on it, so the moving average will move by one unit after each trading day. In addition, some traders use the weighted calculation method, that is, they give different weights to the prices on different dates, which makes the impact of new prices on the EMA more significant.
3. Color of five-day moving average
First of all, it should be noted that the color of the five-day moving average is not fixed, because its color depends on the settings of the K-line chart software and personal preferences. But in most K-line chart software, the five-day moving average is usually red or green. Green indicates that the five-day moving average trend is downward, that is, the current market is relatively weak; Red means that the trend of the five-day moving average is upward, that is, the market is in a relatively strong trend. It should be pointed out that no matter whether the color of the EMA is red or green, it can not be used to judge the trading point of the stock alone, but should be analyzed together with other technical indicators.
4. Use of five-day moving average
The five-day moving average is a simple technical index, but it can provide important market reference. Under normal circumstances, when the five-day moving average moves upward and turns head with the price, it can be considered that the stock is rising and a buy signal is about to be generated; When the 5-day moving average moves down and heads down with the price, it can be regarded as a downward trend and buying should be reduced. The five-day moving average can be used to analyze the price dynamics of stocks, which can realize rapid investment and efficient risk control, so it is widely favored by short-term investors.