How to Choose a Energies Trading Moving Average to Trade With

Choose a Moving Average to Trade With Energies Trading Strategies

A trader can choose a moving average based on the energies chart time frame that he is trading: the trader might choose to use this Moving Average indicator on the minute charts, hourly charts, day energies charts or even weekly energies charts.

The energies trader can also choose to average the closing energies price, opening energies price or median energies price.

Moving average energies indicator is a commonly used indicator to measure strength of energies trends. The data is precise and its output as a moving line can be customized to a energies trader's preferences.

Using the energies moving average is one of the basic ways to generate energies buy and sell trading signals which are used to trade in the direction of the trend, since the Moving Average indicator is a lagging indicator & a energies trend following technical indicator - this means that it will tend to give late energies entry signals as opposed to leading energies indicators. However, as a lagging energies indicator it gives more accurate energies signals and is less prone to whipsaws compared to leading energies indicators.

Energies Traders choose the moving average period to use depending on the type of energies trading they do: short-term energies, medium-term energies and long-term energies.

• Short-term energies trading: 10 - 50 Moving Average Period
• Medium-term energies trading: 50 - 100 Moving Average Period
• Long-term energies trading: 100 - 200 Moving Average Period

The energies price period in this case can be measured in minute charts, hourly charts, day energies charts or even weekly energies charts. For our example we will use 1 hour energies chart timeframe period.

Short term energies moving averages are sensitive to energies price action and can spot energies trends signals faster than the long term moving averages. Shorter term energies moving averages are also more prone to whipsaws compared to long term moving averages and a trader should choose a energies price period that will generate a energies signal early but not give too many energies whipsaws.

Long term energies moving averages help avoid energies whipsaws, but are slower in spotting new energies trends and trend reversals.

Because long term moving averages calculate the average using more energies price data, it does not reverse as fast as a short term energies moving average and it is slow to catch the changes in the energies trend. However, the longer term energies moving average is better when the energies trend stays in force for a longer time but may also give late energies signals.

The work of a trader is to find a moving average period that will identify energies trends as early as possible while at the same time avoiding fake-out signals (energies whipsaws).