Modern trading software means that
calculating a moving average by hand has become obsolete, but the distinction between the different calculations is important.
They calculate the moving average by taking a stock's closing prices over a period of time, adding them up, and then dividing by the number of days in that period.
The data used to
calculate a moving average can come from a daily bar, as in the examples above, or it can come from five - minute or 15 - minute price bars, for example.
An index or stock with a current price above its moving average is performing better than it has during the period used to
calculate the moving average.
2)
Calculating moving averages and plotting.
A worksheet on moving averages allowing pupils to
calculate moving averages and to plot them to enable trends to be discovered.
It is possible to get different signals if using unadjusted closing prices to
calculate moving averages.
Please note the data source is Yahoo Finance and I use the dividend adjusted closing price to
calculate the moving average.
he data source is Yahoo Finance and I use the dividend adjusted closing price to
calculate the moving average.
The most common way to
calculate the moving average is to work from the last 10 days of closing prices.