Simple Moving Averages:
The simple Moving Average (SMA).Can be simply defined as the average which is used in technical analysis by indicating the average of price within a period of time.Mostly,The closing price of each period are always used for it calculations.
The simple Moving Average (SMA) has been think about in technical analysis as one of the most essential indicators which has made the moving average very simple and easier to use.Daily traders and analysts has given it a common name known as mobile,This is because the share price is always moving.
It is regularly used in measuring the direction of trend.It has been made clear that whenever the SMA move up,The trend is bullish and whenever the trend move down,The trend is bearish.
Exponential Moving Averages:
The Exponential Moving Average (EMA).Unlike the Simple Moving Average,It is used to calculate the average price over a given period of time.This add more weight,To the current price data,And makes its development more fast to the price changes.
The EMA always make sure the old and recurrent data will not have the same power and influence in the indicator as most new data.When it comes to SMA all the data is having the same weight
Even though,The EMA has been regarded as the oldest trading indicator,But traders are still using.Traders include it into the chart to help them find out the directions and trends whether being ups and downs on the chart.
Anytime you want to calculate for the simple moving average,You will add the prices gained from closing in the period of time,It will be next divided by the number of period on chart.
An example on my own,Let assume that we have these five closing prices.
Day 1=$10
Day 2=$20
Day 3=$25
Day 4=$30
Day 5=$35
We can calculate for Simple Moving Average with the price of the last five closing price.We then add these prices together and divide by five,This will make as get,The sum up number of time period.Below is my formulae used.
SMA=cp1+cp2+cp3+cp4+cp5 divide by 5
The outcome after the calculations will be the average of price at that moment
Anytime you want to calculate for exponential moving average,You will add up the new market price and EMA price.Below is my formulae.
EMA=(New Price X Average of SMA) + (The Previous EMA)
With this we can calculate for EMA.
First Way.
The very first way to go about is to use the combination of a long and a short term moving average that crosses.So whenever the short-term moving average crosses through a long term moving average this will blow up in bullish,Whiles whenever a short term moving average crosses below the long term.This will also blow up in bearish.
Second Way.
Also the second way to go about,Is that you would like to see the price move above or below,The moving average which will blow up in signal to obtain into the trading.
Both the SMA and EMA are calculated differently.The EMA always makes calculations very faster to the price change,While SMA always react very slowly to price change.That is one of the main difference.The idleness that has give rise to SMA to move has bring about that sometimes signals are produced very late to work in the market,This can make any operator to lost some good time.In problem like this,It is advisable to use the EMA to operate because it is very fast and quick when looking out for a new trend.
The Fibonacci Retracements is a method responsible of starting a resistance and support level in the technical analysis of a financial market.The levels are mostly recognize as a horizontal lines showing all the level of resistance and support,These levels are connected to a percentage showing clearly whether there is an upwards or downwards movement to specify if the price on market has fallen or not.
The Fibonacci Retracements number is an order of addition starting from 0 and 1 to a countless of the above term,Below I will be giving an example for more understanding.
0+1=1
1+2=3
14+3=17
15+5=20
20+15=35
24+19=43
30+23=53
50+40=90..........
As we all can see,Using the Fibonacci Retracements we can easily order and determine levels and set price,Trader can easy see all the uptrend on market.The same trend has already fall and having an average of 61.8%,So the trend has been rebounds so the trends has started rising again.So the rebound happened at the Fibonacci level,Giving all traders the chance to see the trend rose to determine whether to buy or not.
After being sure and confirming a Fibonacci Retracements,An attainment magnitude of the movement is been calculated.A precise percentage is used,That has been obtained from Fibonacci numericals series to the sum up of magnitude.One of the commonly used is the Golden ratio that is 61.8%,This can easily gained by dividing the series number by the next number
1. Show step by step how to add a "Simple and Exponential Moving Average" to the graph (Only your own screenshots - Nothing taken from the Web).
In this question,I will being giving steps by steps on how to add both simple moving average and exponential moving average on a chart.I will be using META TRADER 4 to perform my task.
Step 1
First I will search through my apps for the META TRADER 4 on my phone,After seeing the METATRADER 4 i then open.I will be giving screenshots below.
Step 2
The next step is you click on any pair you want to add moving average too.For me I decided to click USDCHF.I will be showing screenshots below.
Step 3
After opening the pair,It will be showing only the chart.After the chart opens,You will look at the top of the chart you will found f icon.I will be showing screenshots below.
Step 4
You will then locate trend indicator.Then search for moving average.I will be showing screenshots.
Step 5
You will now need to add simple moving average.For this exercise I decided to add 10 simple moving average and 50 exponential moving average.I will be showing screenshots.
As you can clearly see in my screenshot,There are some interesting feature which I believe we all will love it.Example the period was 40 but I decided to change to 10,And I also took simple in my method.After doing all my changes and I was satisfied with the setting, So click on done.The 10 moving average I chose will be added to the chart.
Here in the exponential moving average,I took 50 for my period.For the method I chose exponential.After I finished with my setting I then click done.The exponential moving average will also be added to the chart.
Step 6
After everything,You then return to your main chart to check whether the moving average has been added to your chart.I will be giving screenshot below.
As you can see from my screenshot.The moving average has been successful added to the chart.The red line on the chart is the 10 simple moving average and the light orange line is the 50 exponential moving average.
2. Use "Fibonacci Retracements" to chart a bullish and bearish move (Own screenshots only - Nothing taken from the web).
Whenever you want to add Fibonacci Retracements to a chart,You will click fib Retracements.I will be showing screenshot below.
Screenshot from my trading view app on my phone.Showing Fibonacci Retracements icon.
After done clicking the Fibonacci Retracements icon.To draw a bullish trend on the chart,You will draw the slope from the swing low to high string of any move you prefer to get Retracements for.I will be giving screenshot below.
Fibonacci Retracement on Bullish Trend
For the bearish move,You can apply same method you used to draw the bullish trend but this will be the opposite of the method.That is you will draw the slow from the swing high to the swing low.I will be giving screenshot below.
Fibonacci Retracement on Bearish Trend
I would like to thank prof @lenonmc21 .For such a great and understanding lesson,Indeed I have really learn a lot about the lesson.