Moving Average Indicator

In Indicators

Simple Moving Average (SMA)

The arithmetic mean is, perhaps, the most used and differs from the others above all, to “Simple” calculation from which it is generated. Although it is the moving average more used, it is based on a calculation that always assigns the same importance to a given value and for this, it is not very suitable for signals with one minute expiration time frame. For example let’s analyze a simple moving average of 10 periods (10 market days). It has the flaw of assigning to each day the same importance (then 100/10 = 10%), while it is known that a market day does not have the same characteristics of another. Compared to other moving averages the SMA is rougher as not diversify the market according to its movements, which however are able to make the WMA and the EMA.

moving average

Exponential Average (EMA)

It Differs from Simple Average especially for the calculation based on progressive values and non linear. Many traders consider the EMA more reliable than the SMA and WMA, but there are many schools of thought. For us who work on the short-term it is the best along with the WMA. In fact, the WMA is able to provide a most reliable information by exponentially data calculation.

Weighted Moving Average (WMA)

The WMA was created to satisfy SMA lacks. Even this kind of moving average is not free from criticism, in fact is a very reliable medium, but at the expense of the updating speed.

We suggest to use indicators with our partner Trading View and take a look also at the Candlestick Patterns guide.

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