Moving Averages
Overview
Moving averages
are a technique of classic
time series analysis.
Moving Averages are typically used in strategies that purport to follow trends. That is, if the current price is above a given
moving average, then that indicates the asset is in an upward trend and is a buy. If the current price is below the moving
average, this would indicate that the trend is down and should be sold.
Trend following is pitched as being a strategy that can work in both bull and bear markets, because the trader is following
the trend.
The
Turtles
represent a famous example of a trend following trading strategy.
Indicators
Moving averages are typically used when
trend following.
However, there are several different indicators built from moving averages that are commonly used.
Moving Average Whipsaw
