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DEFINITION of 'Moving Average Chart'

A tool used by technical analysts to track the price movements of a security or commodity. It plots average daily settlement prices over a defined period of time, anywhere from a few days to a couple years.

BREAKING DOWN 'Moving Average Chart'

Usually, when a stock price moves below its 50-100 day moving average, things are not in your favor. The opposite is true for stocks that protrude their moving average.

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RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. 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 >>
  4. 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 >>
  5. How do I construct a Moving Ribbon strategy?

    Learn how to construct a moving average ribbon strategy, which plots as many as eight or more moving average lines on a price ... Read Answer >>
  6. 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 >>
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