It is one of the most used and appreciated strategies, and is based simply on the calculation of average prices over a given period. Let's see together how Mobile Media works and how it can bring profit to investors.
When thinking about trading strategies, the first that comes to mind or that is usually recommended to newbies is probably the so-called "moving average", which is the one that assesses the change in the prices of an asset over a certain period of time. There are two reasons for this diffusion: first of all its general reliability, and then its relative simplicity of learning. Yet there are different types of this strategy, as we shall see.
Let's start immediately by defining the moving average (which can be adaptive, simple, centered, weighted and at 20, 21 and 50 periods) in the clearest possible way even for those who are not accustomed to the language of trading, starting from the decomposition of the two parts of its name. Well, this type of technique examines the prices of an asset in the pre-established time, that period (that is, the market sessions or the days inserted in the calculation), making it the average, and it is mobile because it is constantly updated. So, for example, the 10-period moving average contains the last 10 closing prices of the asset: the next entry "goes out" the oldest, and so on, so as to always obtain updated and valid data.
So far, it would seem to be just a collection of data. But the importance of this strategy, particularly in the field of binary options, is given above all by the ability to analyze the graphical representation of its results, which usually appears as a wavy line that, in some points, intersects the price: these are decisive signals for trading, because they offer predictability information about the direction of the market in the immediate future
In particular, analysts explain that we are close to signs of increase when the price "holes" its moving average from bottom to top, and that instead it is likely to decrease when the intersection occurs from top to bottom. When a trend changes direction, these signals create excellent investment opportunities and winning trades, especially when using high/low binary options.
There are of course warnings to follow to avoid throwing yourself into the bar and exposing yourself to the risk of loss. For example, if the price is above the moving average and has been in this condition for a long time, it is likely that it will encounter resistance in the near future. In short, we need to study data and graphs well, so as to be able to identify the underlying market trend; another advice is to carry out a further check to make sure that we do not risk a trend reversal, turning attention to the 30-minute bars, then to the price movements of recent weeks, to compare them with those of recent days and verify their valuations.
Practice certainly helps you not to make mistakes, but there are also "general" suggestions you can follow to reduce risks, as recommended for example in this in-depth guide to moving average. For example, when the market moves through the moving average, experts recommend waiting for a number of periods to confirm the crossover and see if the market is moving in the direction actually expected.
To eliminate false signals, then, you can decide to wait for the market to cross the average for a minimum extension before investing: the rule wants this extension to be calculated using a percentage of the price of the asset, an average of the last periods of trading intervals, or another relative value generated by a technical indicator.
Finally, the last tips are about researching to increase volume (i.e., investing only in crossings that are accompanied by an increase in volume) and using "high/low" strategies: in the face of a bullish trend, one can assume as a rule to aim for the "low" only when the price crosses the moving average: on the contrary, in a downward trend, one can wait for the approach to the average before investing in a trend reversal.
Moving averages are indicators that allow you to trade in Forex market to implement effective operational strategies, with the comparison of historical averages of data to understand the primary trend that markets at that time follow. The result is a lineacon with a rather soft trend, whose inclination can give us a more aseptic view of the direction of prices.
Although they are not perfect and show obvious defects and the items they highlight are sometimes either overrated or ignored, they remain an indispensable tool for analysis. Moving averages are divided into three categories: simple, weighted and exponential.
The simple is the arithmetic average of a series of prices within a given period.
Being an average between the last price and a series of previous prices, the line will move:
If the line follows a lateral trend, exactly like prices, it will not find a direction and will continue to intersect the price bars. The moving average always reacts with a delay to the change in price direction.
The main shortcoming of the simple one, which takes the greatest prominence The values of the prices furthest away, taking into account the values of the most recent prices, is that the most recent ones are supposed to be able to represent more accurately what is currently happening in the market.
Much used by traders and forex traders is the exponential moving average because it has many advantages including, that of allowing the analysis of a historical series, long enough, in order to identify the short-term trend followed by the market, giving more importance to the latest price data.
The calculation of the exponential moving average foresees that the first value is equal to that obtained with the simple one. For all the others, we need to calculate the multiplier coefficient, the fundamental basis for the construction of exponential moving averages.
The following formula shall be used to determine the coefficient of multiplication
multiplier = cm = (2/(n+1))
Before placing on a moving average, you must choose the period, i.e. the number of prices, or the bars, taken into account for the final calculation.
If you want to calculate, starting from today, an average of 5 days, you should multiply by 1 the first value of the series (the detection of 5 days ago), by 2 the second (the detection of 4 days ago) and so on until the last value (the detection of today) to multiply by 5.the total given by the sum of all the quotations multiplied by the relative weight should then be divided by the sum of the weights themselves which, in this example, would be 15 (i.e. 1 + 2 + 3 + 4 + 5).
Forex moving averages analyze currency exchange rate trends. An advanced method involves the use of two or more moving averages: one slow and one fast (for example: one 200 days and another 50 days).
Let's start doing it seriously: if you want to go to trading school, here you will find bread for your teeth! Becoming a successful investor means understanding what the peculiarities of this activity are and looking for "masters" from which to take inspiration to make profits in the shortest possible time.
Oggi parliamo di uno strumento, l'oscillatore stocastico, che rappresenta un utile indicatore atto a minimizzare la volatilità dei prezzi di un particolare strumento finanziario. Utilizzando questo strumento sarà più semplice, per l'investitore, leggere il mercato e trarne dei benefici pratici.
Continue our journey around some of the best known advanced trading strategies. In this case, we will analyze Bull Spread, a technique that is usually used if you have the feeling that the market is taking on bullish traits.