Understanding indicators - Part 4: The Moving Average
Continuing with our series of using indicators effectively, we will cover the “Moving Average” this session. The moving average is one of the most commonly used indicators. Unfortunately if not used correctly, it becomes one of the most lagging indicators. Most traders tend to use a crossover of 2 moving averages, which more often than not, gets you in the trade when half the move is already done. The trader gets into the action when price is ready to change trend & thus cannot profit from it. We will have a look at using the moving averages effectively, thus reducing the lag. Plus we will look at a different & unconventional combination of this indicator.
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