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Moving Averages
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Here
is an explanation and example of the indicator
called the moving average.
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A moving average is
a technical indicator that averages a number of
consecutive price moves. The number of periods used
(days, hours or minutes) is a different variable for
different charts.
The moving average is
usually used for trend following, and likewise could
help you determine a short or major trend in commodity
future, but it is not a very good indicator in a choppy market.
A moving average can be
a single line of one time period, in which a signal is
given when the price of the futures move above or below
the moving average. Or you can have multiple time
periods in which a signal is given when the moving
averages cross over each other.
A shorter period for
the moving average will give you a shorter trend for
short term trading.
Below is an example of
a moving average.
Chart
Courtesy of Commodity Price Charts
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