The high low moving average
The high low moving average is a study that allows a person to quickly calculate an average of both the high and low for a specific interval.Traders sometimes use this data as a way to measure the support areas as well as the resistance areas of the market. These areas tell the traders at what price level buyers enter the market and
make purchases and at what price level do sellers acquire profits.The average high is the resistance area.The average of the low is the support area. The high moving average contains ten bars and the low average contains eight.
Since this a system that changes a person can alter the guidelines of the trading system. For example it is some traders preference to buy and sell breakouts above or beneath the resistance or support areas.Others, have a tendency to use the resistance and support areas as regions to build a market position that goes in the direction of influencing market trend.
Usually, the high low average isn’t a system that can be crossed over. The system creates a channel. This channel goes around the bars on the price chart. When a market is experiencing a strong trend the price may trade past the channel. The price will go above or below the price chart. A trader might use the break from the channel as an indicator to build a market position that compliments it. A solid break or an escape from a price channel may signal that a trend is forming.A break outside the channel that is counter to the underlying trend may indicate a contrarian entry signal.
High Low Moving Average Channel
Most famous traders use combination of several moving averages to watch breakout moments, watch trend and how strong is trend.
On chart above we have 3 moving average channel. We have EMA 50, EMA 100 and EMA200 moving average channel. If we see strong change in trend price will very fast move from above/below channel to below/above channel.
Other combinations for High Low Moving Average channels are :
EMA 50, EMA 100 and EMA200
SMA8, SMA21 and SMA89
SMA13,SMA21 and SMA55
The high low changing average utilizes several different properties. Period 1 is the distance of the first moving average it is found using a default value of ten. Period 2 is the distance of the second average its application also uses a default value of ten. Aspect 1 is the symbol field that the study will be computed on, this application utilizes a default of high. Aspect 2 is the symbol field that the study will be computed on, this application uses a default of low. The high low average combines these several different types of analysis into one single indicator. The high low average study can also be used to find the volatility. When the volatility is up that means the channel has widened which the volatility is down that indicates that the channel has narrowed.
This measurement can be combined with other measurements in order to calculate prospective entry points. The high low moving average is an excellent tool for both binary and non binary traders. The tool provides over five types of trading indicators making it simple and easy for traders to know exactly when to buy and sell their stocks.The high low moving average is simple enough for newbie traders to calculate. It’s data is reliable enough for it to be a favorite tool of seasoned traders. This quick and easy study will provide most of the data that a trader needs for their market analysis.
