I know MOVING AVERAGES are basically used to average x numbers of candles, I believe there's still more. I will be happy IF those with vast indicator knowledge data base can help answer my questions.
Am onto something.Ignored
- To gauge whether there are more buyers than sellers (and vice versa) in the market at a given time span (number of moving average). If price is higher than the MA, then there are more buyers. If price is lower than MA, then there are more sellers in the market.
- To gauge the increase and decrease of momentum of buyers and sellers. the greater the deviation from the moving average the greater the momentum. Momentum plays a role in assessing the level of risks you are taking.
- To gauge the shift from one market condition to another, depending on price deviation from the moving average.
- To identify the beginning phase, the middle phase and the exhaustion phase of the market condition.
- (More advance uses) To gauge or simplify multi-timeframe into a single and lower time frame. A 120 moving average in a 1 minute chart is equivalent as placing a 2 moving average on an hourly chart. Or a 360 moving average on a 5 min chart is equivalent to placing 30 moving average on an hourly chart.