“Currently featured in Toyo Keizai ONLINE” What moving averages indicate
Good morning, this is Matsushita.
I look at charts every day,
and there is always a moving average displayed there.
Before I realized it, more than 17 years have passed
since I started watching moving averages,
and there are things I only notice now.
Among technical indicators,
the most representative and major,
and the seemingly simple moving average,
the truth is, its depths are astonishingly deep.
What the moving average indicates is
the direction of the trend.
The moving average is configured by a variable that asks
how many past closing prices you want to average,
and its sensitivity changes accordingly.
The first one I used was
the 10-day moving average.
With just this one line,
I was able to make profits at the time.
Later, as I explored various rules,
I came to watch the 100-day moving average,
then the 30-day moving average,
and more recently I sometimes look at the 200-day moving average.
As the variable changes, the visible trend changes,
and you adjust the variable according to your goal.
There is clearly no such thing as a moving average with a variable
that is obviously effective and easy to profit from.
Many investors have this misconception,
and the most popular video on our company's YouTube channel
tells it’s exactly that.
Most-viewed video
“Which is more profitable, the 10-day, 25-day, or 100-day moving average?”
Each moving average has its own
advantages and disadvantages,
and of course there are deceits as well.
The concept and definition of deceit are fundamentally flawed to begin with,
and there is no other option but to acknowledge probabilities.
To utilize probabilities,
you must determine various rules,
and conduct verifications.
Trading is, no matter how long passes,
a repetitive core activity.
Even for a veteran investor with 20 years of experience.
Moving averages are highly effective
and useful indicators,
and they are tools with depths deeper than you might think.
By mastering them,
you can realize substantial profits.
To draw out even more of their power,
learn about moving averages and verify them.
ps
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