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A two period moving average forecast for equity instruments is based on an daily price series in which the stock price on a given day is replaced by the mean of that price and the preceding price. This model is best suited to price patterns experiencing average volatility.
The simple moving average model is conceptually a linear regression of the current value of price price series against current and previous (unobserved) value of equity instruments. In time series analysis, the simple moving-average model is a very common approach for modeling univariate price series models including forecasting stock prices into the future

Simple Moving Average In A Nutshell

When picking what period length to use, keep in mind the longer you extend to period, the smoother the line will be. Conversely, the shorter the periods the more choppy and variable the line may be. One way to use the moving average is to gauge when a stock is getting to far away, as this can allow you to implement the idea of mean reversion. Using the moving average in conjunction with standard deviation or Bollinger Bands, you can get an idea of where the price average is and plan accordingly.

When you first hop onto a charting platform and look at the tools, you will note the various types of moving averages. You can essentially pick any average type for any given length of time. For this article, we will specifically go over the simple moving average and how you can use it in your investing and trading techniques. How the moving average is calculated is by adding up all the closing prices for the period you determine, and dividing them by the total number of periods you have chosen. Not that you will ever need to do this, it is nice to understand how the tool you are using works.

Closer Look at Simple Moving Average

When implementing this, you want to play around with the periods to full understand what will work best for you trading style. Popular periods include the 20 period, 50 period, and 200 period, but these certainly are not the ones you have to use. Be sure to also use it on a demo account first and tweak everything to your liking. You may even end up finding it doesn’t work for you. Either way, this is a great tool to simply gauge where the market has been and where it might want to be. If you need ideas, join an investing community and bounce your ideas off of everyone, as they are more than willing to help.

Use Investing Themes to Complement your positions

You can quickly originate your optimal portfoio using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

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Run Office Supplies Thematic Idea Now

Office Supplies
Office Supplies Theme
Companies producing and selling office supplies, and accessories. The Office Supplies theme has 40 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Office Supplies Theme or any other thematic opportunities.
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Check out your portfolio center. Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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