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moving average are useful in identifying pepe unchain Bnb Eth XRP aave Bitcoin Bonk

When should you use moving averages?

You should use moving averages in technical analysis when a security is trending because moving average is a trend following indicator. Application of moving averages would be ineffective when a security moves in a trading range.

How is a trend identified using moving averages?

There are three ways to identify a trend using moving averages: direction, location, and crossovers. The first trend identification technique uses the direction of the moving average to determine the trend. The trend is considered up when the moving average is continuously rising. If the moving average is declining, the trend is considered down.

How is a moving average calculated?

The moving average is calculated differently depending on the type: SMA or EMA. Below, we look at a simple moving average (SMA) of a security with the following closing prices over 15 days: A 10-day moving average would average out the closing prices for the first 10 days as the first data point.

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