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MA moving average

1. Introduction

The moving average uses the principle of statistical moving average to add and average the stock prices within a certain period to obtain an average value, and then connect it to the average line obtained, which is the moving average. MA5, MA10, MA20, MA60, MA120, and MA250 correspond to the moving averages of stock prices on the 5th, 10th, 20th, 60th, 120th, and 250th respectively.


2. Calculation formula

Moving average = total stock price of sampling days / sampling days


3. Application

The eight principles of Grumpy (the timing of buying and selling stocks):

The Eight Principles of Grumpy: The relationship between the moving average price and the price of the day is used as the basis for judging the market.

3.1 When the moving average is gradually flattening from a decline, and the stock price breaks through the average from below, it is a buy signal.

3.2 The average line continues to rise. Although it was once close to the average line or fell below the average line, when the stock price stands above the average line again, it is a time to buy.

3.3 The stock price is on the average line, and the stock price suddenly drops, but it does not break the average line. When the stock price rises again, you can buy more.

3.4 The stock price trend is below the average line, suddenly plummeted, far away from the average line, and the deviation is too large. The stock price is likely to rebound to the average line again, which is also a buying signal.

3.5 After the moving average rises, it remains parallel or falls, and when the stock price cuts in from top to bottom, it is a sell signal.

3.6 When the stock price rises above the average line, but immediately returns below the average line, and the average line continues to fall, it is a sell signal.

3.7 The stock price is lower than the average line. When the stock price rises and falls below the average line, it is a sell signal.

3.8 The stock price rises sharply, suddenly rises sharply, and the deviation is too large. It is very likely that it will fall to the average line again, which is an opportunity to sell.


4. Features

4.1 Stable: It will not rise and fall like the daily line, usually slowly.

4.2 Stability: MA usually only extends upward after the rise is obvious; the stock price starts to decline after a significant decline. However, the stronger the stability, the slower the response.

4.3 Trend: It can reflect the trend of stock prices and has a trending nature.

4.4 Helping the rise and assisting the fall: When the stock price breaks through the MA from the bottom up, the MA becomes a short-term support line. When the stock price falls back to near the MA, it is a buying opportunity. This is the role of MA boosting. Conversely, if it breaks downward, MA will help the decline.