Best Moving Average Settings For 15 Min Chart
Moving averages are one of the most popular technical indicators used by traders in financial markets. They are used to identify the trend direction, as well as to generate trade signals. In this article, we will discuss the best moving average settings for 15 min chart.
What is a Moving Average?
A moving average is a calculation that averages the prices of an asset over a specified period of time. The moving average is plotted on a chart as a line that moves with the price of the asset. The purpose of the moving average is to smooth out the price fluctuations and to identify the trend direction.
Types of Moving Averages
There are three types of moving averages:
- Simple Moving Average (SMA)
- Exponential Moving Average (EMA)
- Weighted Moving Average (WMA)
The simple moving average (SMA) is the most basic type of moving average, where the price of an asset is averaged over a specified period of time. The exponential moving average (EMA) puts more weight on recent prices, making it more responsive to changes in the price of an asset. The weighted moving average (WMA) also puts more weight on recent prices, but it uses a different weighting method than the EMA.
Best Moving Average Settings for 15 Min Chart
The best moving average settings for 15 min chart depend on the trading strategy and the type of moving average used. However, a common setting is the 20-period simple moving average (SMA).
The 20-period SMA is popular among traders because it is a good balance between responsiveness and reliability. It is responsive enough to capture short-term trends, but it is also reliable enough to filter out noise and false signals.
Traders can also use other types of moving averages, such as the 20-period exponential moving average (EMA) or the 20-period weighted moving average (WMA). However, these types of moving averages may be more sensitive to price fluctuations and may generate more false signals.
How to Use Moving Averages on 15 Min Chart
Traders can use moving averages on 15 min chart in several ways:
- Trend Identification: Traders can use moving averages to identify the trend direction. If the price of an asset is above the moving average, it is considered an uptrend. If the price of an asset is below the moving average, it is considered a downtrend.
- Trade Signals: Traders can use moving averages to generate trade signals. For example, if the price of an asset crosses above the moving average, it is considered a buy signal. If the price of an asset crosses below the moving average, it is considered a sell signal.
- Support and Resistance: Traders can use moving averages as support and resistance levels. If the price of an asset touches the moving average and bounces off it, it is considered a support level. If the price of an asset touches the moving average and fails to break through it, it is considered a resistance level.
Conclusion
Moving averages are a popular technical indicator used by traders in financial markets. The best moving average settings for 15 min chart depend on the trading strategy and the type of moving average used. However, a common setting is the 20-period simple moving average (SMA). Traders can use moving averages to identify the trend direction, generate trade signals, and as support and resistance levels.