1. What is Moving Average?

The Moving Average (MA) is a statistical calculation used to analyze data points by creating a series of averages of different subsets of the full data set. It is commonly used in finance, economics, and technical analysis.

2. How Does the Calculator Work?

The calculator uses the simple moving average formula:

Where:

• \( P1 \) to \( Pn \) — Prices in USD
• \( n \) — Number of prices in the period
• \( MA \) — Moving Average in USD

Explanation: The formula calculates the arithmetic mean of a given set of prices over the specified number of periods.

3. Importance of Moving Average

Details: Moving averages help smooth out price data to identify trends. They are fundamental tools in technical analysis and are used to create trading signals.

4. Using the Calculator

Tips: Enter prices separated by commas (e.g., "10, 12, 15, 14, 13"). All values must be valid numbers. The calculator will compute the average of all provided prices.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between simple and exponential moving average?
A: Simple MA gives equal weight to all prices, while exponential MA gives more weight to recent prices.

Q2: How many periods should I use for moving average?
A: Common periods are 10, 20, 50, 100, and 200. Shorter periods react faster to price changes.

Q3: Can moving average predict future prices?
A: No, it only shows the average of past prices and helps identify trends, but doesn't predict future movements.

Q4: Why use moving averages in trading?
A: They help identify trend direction, provide support/resistance levels, and generate buy/sell signals.

Q5: What are the limitations of moving averages?
A: They are lagging indicators, meaning they follow price action rather than predict it.