– Glossary

Moving average

An average of prices over a specified time period (minutes, days, weeks, months, etc.). As a new price is added, the oldest price is dropped to recalculate the average. A three-day moving average, for example, is calculated by averaging the first three days of prices (days one, two, and three). On the following day, the average is calculated using days two, three, and four. Moving averages are used by technicians to spot changes in trends.

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