Moving Average for Ninja Trader, MetaTrader

Moving Average it is the first indicator with which trader getting familiar when he or she starts to learn technical analysis. And if you plan to start using this instrument when you can get a lot of advantages. Because of simplicity, trader can create a lot of strategies. But we plan to discuss the most popular - analysis of trend.

Calculation of Moving Average

There are a lot of methods to calculate the moving average. The most popular that we usually use in our internet-trading is SMA(simple moving average). To find out the value program have to summarize the last N prices (close or open, high or low) of bars and after divide this sum on N.

Also another methods for calculation exists: Cumulative, Weighted, Exponential, Median. You can find out more about those averages in the Internt.

Signals

In your internet trading you can use one moving average for getting a signal. In this case, the analysis looks like this: when a price cross the line of indicator then a signal will appear. But more sophisticated traders prefer to calculate two averages with different periods. The name of line with a lesser period is SHORT and another line is LONG. The rule in this case looks like this: when a SHORT average cross a LONG one from bottom to top then a trader should buy a stock. For selling of a stock the rule is vice versa.

Check the picture below to understand the meaning and usefulness of such indicator.

Moving Average Example

As you can see, this method perfectly show the places when a trader should buy and sell the stock during trend. We also set take profit, stop loss and trailing stop in order to find the better way for selling.

Download trading robot

You may download those applications from our forum. This is link for NinjaTrader and this for MetaTrader.

I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.

Warren Buffett