- What types of moving averages are there
- Which one would I use
- How many types of moving averages are there?
QUESTION: Hey Karma I don’t know if you have already talked about the or not, but what are your thoughts on moving averages? Do you use them in your trading? If so, which ones do you use and how do you use them?
A moving average is simply a way to smooth out price action over time. By “moving average”, we mean that you are taking the average closing price of a currency pair for the last ‘X’ number of periods.
Simple Moving Average (SMA)
A simple moving average (SMA) is the simplest type of moving average. Basically, a simple moving average is calculated by adding up the last “X” period’s closing prices and then dividing that number by X.
Exponential Moving Average (EMA)
Exponential moving averages (EMA) give more weight to the most recent periods
Links and Resources Mentioned in this Episode:
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