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The Moving Average trend indicator (MA indicator) is one of the oldest technical modern indicators and the most often used indicator in technical analysis.
Moving averages are simple, and their strength and utility is in their simplicity. They serves as the foundation stone for various other indicators. A moving average is simply a way to smooth out price action over time. They are used to decrease price hesitation by limited the deviation in price, this they do by smoothing price over a certain period of time
Moving averages are the most simple kind of trend-following indicators. They simply take the data of the latest n-period (n-hour, n-day, and so forth), divide that by the n of the period to reach at the indicator’s present value. The main difference between exponential and simple moving averages is that while the former attaches greatest significance to the most recent period, the latter weighs each period (the present included) equally. In other words, the exponential moving average is more sensitive to the price action of today. In general, the longer the period of a moving average, the slower it responds to price action, and the later its signals will be.
There are the two major types of moving averages: