Displaced Moving Average

DEFINITION of 'Displaced Moving Average'

A moving average that has been adjusted forward or back in time in order to forecast trends. Displaced moving averages are constructed by taking the moving average and shifting it by a number of intervals, either positive or negative. If the number is negative, the displaced moving average will lag the original moving average, and if the number is positive the displaced moving average will lead the original moving average.

BREAKING DOWN 'Displaced Moving Average'

The aim behind displaced moving averages is to allow traders to center the moving average or make the displaced moving average fit better with the price movement, thereby removing some of the noise in the moving average. Some traders believe that displaced moving averages have more predictive power than basic moving averages such as simple and exponential.

RELATED TERMS
  1. Simple Moving Average - SMA

    A simple, or arithmetic, moving average that is calculated by ...
  2. Exponential Moving Average - EMA

    A type of moving average that is similar to a simple moving average, ...
  3. Moving Average Ribbon

    A technique used in technical analysis to identify changing trends. ...
  4. Golden Cross

    A crossover involving a security's short-term moving average ...
  5. Additional Living Expense Insurance

    Coverage under a homeowner's, condominium owner's or renter's ...
  6. Linearly Weighted Moving Average

    A type of moving average that assigns a higher weighting to recent ...
Related Articles
  1. Fundamental Analysis

    1. Displacement

    Learn about the five typical steps of a bubble: displacement, boom, euphoria, profit taking and panic.
  2. Forex

    Moving Averages

    The use of moving averages in technical analysis
  3. Trading Strategies

    Technical Analysis: Moving Averages

    By Cory Janssen, Chad Langager and Casey MurphyMost chart patterns show a lot of variation in price movement. This can make it difficult for traders to get an idea of a security's overall trend. ...
  4. Technical Indicators

    How To Use A Moving Average To Buy Stocks

    The Moving Average indicator is one of the most useful tools to trade and analyze financial markets.
  5. Active Trading

    Moving Averages: How To Use Them

    By Casey Murphy, Senior Analyst ChartAdvisor.com Some of the primary functions of a moving average are to identify trends and reversals, measure the strength of an asset's momentum and determine ...
  6. Fundamental Analysis

    5 Steps Of A Bubble

    Learn about the five typical steps of a bubble: displacement, boom, euphoria, profit taking and panic.
  7. Active Trading

    Moving Averages: Factors To Consider

    By Casey Murphy, Senior Analyst ChartAdvisor.com Data Used in Calculation Most moving averages take the closing prices of a given asset and factor them into the calculation. We thought it would ...
  8. Active Trading

    Moving Averages: Conclusion

    By Casey Murphy, Senior Analyst ChartAdvisor.com In this tutorial, we've covered the basics of moving averages. Here's a brief recap: Few technical indicators are as popular and widely followed ...
  9. Technical Indicators

    Use Moving Averages to Buy Stocks

    A moving average constantly updates a stock's average price, but it cannot predict a stock's performance.
  10. Active Trading

    Moving Averages: Strategies

    By Casey Murphy, Senior Analyst ChartAdvisor.com Different investors use moving averages for different reasons. Some use them as their primary analytical tool, while others simply use them as ...
RELATED FAQS
  1. What are the most common periods used in creating Moving Average (MA) lines?

    Learn the most commonly selected periods used by traders and market analysts in creating moving averages to overlay as technical ... Read Answer >>
  2. What are the main advantages of using Moving Averages (MA)?

    See why moving averages have proven to be advantageous for traders and analysts and useful when applied to price charts and ... Read Answer >>
  3. What are the main disadvantages of using Moving Averages (MA)?

    Learn about some of the inherent limitations and possible misapplications of moving average analysis within technical stock ... Read Answer >>
  4. Why is the Moving Average (MA) important for traders and analysts?

    See why the statistical concept of moving averages plays a central role for traders and chartists who rely on technical analysis ... Read Answer >>
  5. What is a common strategy traders implement when using the Moving Average (MA)?

    Learn about a basic moving average strategy predicated on the relationship between a security's price action and its moving ... Read Answer >>
  6. How are moving averages used in trading?

    Moving averages are very popular tools used by technical traders to measure momentum. The main purpose of these averages ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center