Moving averages are a way of softening prices.
There are many types of moving averages. The two most common with Simple Moving Average Exponential Moving Average and.
Simple moving averages are the simplest to work with moving averages but are very susceptible to price spikes.
Exponential moving averages give more weight to recent prices and hence show what traders are doing now.
It is much more important to know that operators are doing now what they did the week or last month.
Simple moving averages are quieter than the exponential moving averages.
Long periods of moving averages are smoother (move less) than short periods of moving averages.
With the exponential moving averages can respond faster to price action and spot trends more quickly too. However, due to this speed, are also susceptible to price spikes and to give perspectives confusing to operators.
Simple moving averages respond more slowly to price movements but can save you from price spikes. However, for being slow, you can delay taking a good opportunity to open a trade.
The best way to use moving averages is to place different types in the graph, so you can observe the movements of both long-term and short term.
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