January 12 (Thu): Nikkei 225 (Free viewing item: SMA calculation - review -)

Good morning☀

We have received opinions that SMA cannot be understood, so here is another explanation.

Rather, since I’ve written about this before, I’ll post a link againｗ

https://www.gogojungle.co.jp/finance/navi/articles/38557

In the article above

it says that it moved from 98 yen, 99 yen, 100 yen, 101 yen, 102 yen and today is 101 yen

Yesterday's 5SMA = 100 yen, today's 5SMA = 100.6 yen (※ calculation omitted)

Here I’ve omitted the calculation, but when I write the exact calculation it is…

Since SMA is a simple moving average,

Yesterday's 5SMA = (98+99+100+101+102)/5 = 100.0 yen

Today’s5SMA = (99+100+101+102+101)/5 = 100.6 yen

Therefore, even though the closing price yesterday was 102 yen and today’s closing price is 101 yen (the close is down),the 5SMA is risingas a result.

In short, the 5SMA compares today's closing price with the closing price five periods ago (including today, six periods ago).

For this example, by comparing the closing price of 98 yen excluded from calculation with today's closing price of 101 yen, you determine whether the SMA rises or falls.

Therefore, if the excluded closing price is 101 yen and the added closing price is 101 yen with no difference,

Yesterday's 5SMA = (101+99+100+101+102)/5 =100.6 yen

Today’s5SMA = (99+100+101+102+101)/5 =100.6 yen

Of course, it becomes the same.

So momentum indicators and lagging spans are said to have the same concept.

How about that?

Did you understand?

A certain salon host said,

“Williams %R is more sensitive than Stochastics!”

or something like that, but…

is the calculation the same?

It’s a perfect example of not understanding the calculation at all, isn’t it?

Also, in some products

“Williams %R, Stochastics, MACD, RSI…”

they use many indicators and trade where they line up.

Is it possible to understand the calculations when it’s mostly sub-charts?

That is highly questionable?

Indicators inevitably involve“calculations”. If you really dislike, struggle with, or don’t want to think about calculations, you don’t have to use indicators.

There are trading methods that do not use SMA, Bollinger Bands, MACD, or anything at all.

Pursuing that approach is also one path!

（※From here on, market awareness is limited to members only。）