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THE INTERNET'S MOST COMPREHENSIVE LIST OF ONLINE FOREX BROKERS AND FOREX REVIEWS. 

What Are Moving Averages?

When you are trading in the market, moving averages is one of the major technical indicators of
what is to come and what you can expect from the market. The market and its trend reversals are
always mixed with noise which can confuse you and lead to a loss. Moving averages differentiates
the noise from the real trends so that it can help you make decisions in a more precise manner and
take the maximum advantage of the market positions. Moving average is the average of the closing
price of one of the currency pairs for a specified period. This, when plotted on a graph, gives you a
clear indication of what is to be expected from the market. The slope of this graph can help you
determine the potential direction of the market with more accuracy before you decide to invest in
the pair. The price action is smoothed out by moving averages which gives you a better look at the
real trends. If the moving average is smoother, it will most likely not react much to the price
movement. On the other hand, a quicker reaction to the price movement can be observed with a
choppier moving average. The longer the period of your moving average, the smoother it tends to
get. It is also useful to optimize the period considering the pair to ensure that there aren’t too many
data points in the moving average to too less which can hamper the graph itself.

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