The 20 moving average is a technical indicator based on market price trends. It is based on the average price of the market over the past 20 trading days. It reflects the trend direction of financial assets such as stocks, futures or foreign exchange, and can be used to judge The buying and selling direction of stocks, futures or foreign exchange. By monitoring the 20 moving average, you can grasp the market trend at any time and conduct trading operations accordingly. At the same time, the 20-day moving average is one of the most commonly used tools in stock analysis.
Second paragraph: What does it mean to stand firm on the 20 moving average?
Standing firm on the 20 moving average means that after the price trend of stocks or other financial assets crosses the 20 moving average, it can stabilize here. Above the moving average, a certain amount of support and rebound force is formed. This trend often indicates that the market is improving, and the stock price will rise further. You can hold or buy the stock, or it may form an obvious bull market. On the contrary, if the price does not stabilize at the 20 moving average, this trend is a short-term rebound and there is no possibility of the trend continuing.
Paragraph 3: How to use the 20-day moving average for trading
The 20-day moving average has a stable support and resistance role and can provide important trading signals for analysts. In stock trading, if the price crosses the 20 moving average, the bulls have the advantage and can buy stocks to make profits; if the price falls below the 20 moving average, the shorts have the advantage and the stocks already held should be sold to avoid risks. In addition, if the 20-day moving average moves upward and the trading volume is also increasing, it means that the market trend is beginning to strengthen and you should seize the buying opportunity; if the 20-day moving average moves downward and the trading volume is also declining, it means that the market trend is downward and you should sell. to avoid risks. To sum up, using the 20 moving average for trading requires analyzing market trends and time-sharing volume changes, and making trading decisions after comprehensively considering various factors.