Some of these, like the volume-weighted moving average, look at volume to determine what weight should be given to every historical closing price. In addition to the simple moving average, there are many more types that have taken the concept to the next level. One of the most well-known examples involves a crossover by the 50-period moving average over the 200-period moving average, which is called a golden cross. You may also use two moving averages in conjunction to create a cross over signals. When using moving averages to determine the direction of the trend, it’s often done long term, using the 200-period moving average. The most common trading approach involving moving averages is to assume that the trend is positive if the average has a positive slope, and the price trades above it, with the opposite conditions applying for a negative trend. Being no more than a simple average, it was relatively easy to calculate and draw on a physical chart. Being so simple, it was one of the first technical indicators that were used by technicians before the advent of computerized trading platforms. The moving average is perhaps the most well-known trading indicator there is in trading. Let’s start with the perhaps most common trend following indicator of them all, namely the moving average indicator. However, they all have their uses, and definitely can be turned into profitable strategies with the right techniques! The information displayed through the IC Social application is not intended for any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.In this article, we are going to look closer at the ten best trend following indicators that can be used to either assess the strength of the trend, as well as its direction.Īs you’ll see, some of these trend following indicators are really common and well-known, while others are less popular. Raw Trading Ltd makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast, or other information displayed through the IC Social application. Any analysis displayed through the IC Social application does not constitute a personal recommendation and does not consider your personal investment objectives, investment strategies, financial situation or needs. Past performance is not a guarantee of or prediction of future performance. Information displayed through the IC Social application shall not be construed as containing investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary. Raw Trading Ltd registered in Seychelles with registration number: 8419879-2, is regulated by the Financial Services Authority of Seychelles with License number: SD018.Risk Warning: Trading Derivatives carries a high level of risk to your capital, and you should only trade with money you can afford to lose. The information on this site is not intended for residents of the U.S., Canada, Israel, New Zealand, Iran and North Korea, officially the Democratic People's Republic of Korea or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Risk Warning: Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. IC Markets (EU) Ltd is a limited company registered in Cyprus and is regulated by the Cyprus Securities and Exchange Commission with License No. International Capital Markets Pty Ltd with registration number 123 289 109, is regulated by the Australian Securities and Investments Commission with License No. Raw Trading Ltd registered in Seychelles with registration number: 8419879-2, is regulated by the Financial Services Authority of Seychelles with License number: SD018.
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