The program enables you to plot four kinds of moving averages: The line of a moving average smoothes the movement of prices shown on a bar chart. In very simple terms, a moving average divides a series of prices by a pre-defined number of periods. The quotient of this calculation provides a point. Connecting these points over time results in a moving average. The following graph illustrates the performance of the four moving average overlays available in the program. REPLACE FIGURE This graph was derived by plotting 11 period hamming, simple, weighted, and exponential moving averages on a single data point. To compare the performance of these moving averages, consider the following graph. REPLACE FIGUREMoving Averages and Overlays
Weighted Exponential Hamming ModifiedMoving averages are overlays--that is, they are plotted over, or on top of, a bar chart. Bollinger Bands, Moving Average Envelope, Parabolic, and Keltner Channel are also overlays.