The moving average is an indicator that tells the average closing price of a stock over time. The 10-day moving average is also one such indicator that traders use.
Do you know what it is? Stay with us to learn how to make profits using this indicator.
The 10-day moving average is a technical indicator used in trading sessions. It indicates the average closing price during the last ten trading sessions. This indicator determines the strength of a price trend, which will eventually help you place sell signals.
Open Trading Account and Start Trading!
The 10-day moving average is calculated by adding the closing price of the last ten trading sessions and then dividing the value by 10. This means that the average price for today will be the average of the previous 10 days.
However, if you were to calculate the average price of the next day, then you need to remove the first day from the calculation, and today's price will be added to the average calculation.
The moving average can be added to your charts by following these steps:
Tap on the indicator option
In the menu, choose MA or moving average
Then select the number of days as 10.
Choose the type of moving average.
Opt for the simple MA if you are a beginner.
After setting up this indicator, a trend line will be visible on the charts. The 10-day moving average trend line is represented in the following way in charts:
Strategies that involve using 10 days MA as an indicator are:
If the 10-day moving average of a stock has sufficiently progressed from the last 10-day average, traders can place a sell order for the stock to book profits. Furthermore, such a trend downwards indicates the bearish nature of the stock, and traders can sell their positions and exit.
The 10-day moving average helps traders in forecasting a stock’s trend. This average is more accurate for the short term as the long-term charts get smoothened over time.
The 10-day MA is a technical indicator representing the average closing price in the last 10 days. This average value helps traders forecast if the stock is bullish or bearish in the future. It allows traders to take trading calls and making strategies.