Email of the day on moving average calculations
Comment of the Day

June 13 2022

Commentary by Eoin Treacy

Email of the day on moving average calculations

Not that there isn’t anything else to consider today, but I would appreciate more information on moving averages as discussed in the audio.  I realize there are several types that can be applied and they present different results. 

Is there a standard across the board we should apply or is one appropriate for a type of chart and time period and not for another?  I just want to know how to apply what and when.

Eoin Treacy's view

Thank you for this question which many people are wondering about at present because several major stocks and indices are testing their respective secular trend means, defined by the 1000-day MA.

In the Chart Library we only calculate moving averages using daily closing data. That result is then plotted on any time series regardless of whether one is looking at a daily, weekly or monthly chart. Historically, systems defaulted to a simple moving average but many technicians and algorithmic traders use exponential averages.

Bloomberg calculates average of daily charts using daily date but calculates weekly charts using weekly data and so on. That will have an effect on what level the average is displayed at.

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