Hi everyone - this is matt from match strats. This video is the first in a series where i'll be covering stock market technical analysis to start things off i'll, be discussing the popular moving average indicator moving. Average indicators are widely used because they help smooth out price action. In a sense, they help filter out the noise from random short-term price fluctuations.

When utilized properly moving averages can assist in identifying trend direction. Additionally, they can help determine support and resistance levels. It is important to note that, since the value produced by this indicator is based on previous prices, it is considered to be a lagging indicator. There are two types of moving average indicators.

You should be aware of simple and exponential: the more basic moving average. The simple moving average is a straightforward computation. You would add a set of values together, in this case the prices of a stock and then divide by the total number of values. The exponential moving average is more complex relative to the simple moving average because it gives more weight to the recent values.

This variation is considered to make the indicator more responsive to the newest stock price values. As expected, the computation for the exponential moving average is also more complex. Typically, this formula is used. Luckily, for us, you never really need to do either.

Of these calculations by hand, every trading platform i have ever used has provided these computations to me all. You have to do is select the trading period as in how many of the previous trading bars you want to be taken into account. 10, 20, 50 and 200 are all very popular options, but you can pick a window length that best suits your needs. What moving average length you should use depends on your objectives.

Shorter windows are commonly used for short-term trading and longer windows are better suited for long-term investors. It's fairly common to utilize, multiple moving averages at one time. Many traders and investors consider stock prices breaking above or below a moving average indicator to be a key trading signal. Furthermore, some traders look for different moving averages to cross over each other to signify the current trend.

I am compelled to mention that stock market prediction is no simple process. Many people have lost considerable amounts of money attempting to do so, even though it's impossible to predict exactly what will happen. You can give yourself better odds by using technical analysis when it comes to your money, you should always be stacking the deck in your favor. I hope you found this to be a concise explanation of the moving average indicator.

If you already use this indicator, let me know in the comments below, if you learned anything or found this video to be enjoyable. I would appreciate it if you could share it with a friend and hit that subscribe button thanks for watching and as always may the odds be in your favor.