MA- Beginner Choice

Moving averages are calculated by averaging stock prices within a certain period (5, 10, 30, 60, 120, and 250 days) and then connected to form a line. The relationship between the moving averages (MAs) and the price of the day is used as the basis for making trading decisions.

The decline of a MA is gradually flattening, and when the stock price tops the MA from below, it is a buy signal.

After an MA rises, it remains parallel or falls, and when a short-term MA falls below a longer-term MA, it is a signal to sell.

The flip side of a MA would be the backward-looking by nature, as they rely on past data that can never be applied to the future. Therefore not always 100% accurate.

As always, trade with caution.

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