We don’t know, but we have some experience using the two (now deprecated) moving averages:
The top 5: the price movements that are most significant to us. (1) The moving average of the last 5 months; 2) The price movements over the last 3 years; 3) The price movements over the last 5-7 years; and 4) The price movements over the last 10-15 years.
The reason behind this is that most markets have some period of time in which the moving average is the lower end (the “lower” time interval) than the long-term average. That is, over the long-term, the upper or “upper” end of the trend is more significant.
For example, if we want to learn something from the chart below, we can look at the price of S&P 500 (blue), since the last time we looked, the price of the index has increased.
What is the “trend line” (trend average)?
The trend line is the line on the upper left portion of the movement bar. The trend line represents just exactly this moving average (lower) end. It is not a moving average of the previous trend, it represents the lowest price point of this past trend, and just like the average above and below it, it was also an extremely low point of the previous trend (or the last trend): the price at which the lower end of the trend had not moved enough to push the upper end out of line.
It’s this lower end of the trend that is best for getting a price target out of the moving average (moving average of trend: 1).
(Also see: How should I set my target price?)
How much is the trend line moving?
The trend line is moving more slowly (less slowly) than the moving average of trend; but if we want, we can compute the trend line (a.k.a. the trend average) to see how slow and steady the trend is:
The trend line is moving more slowly than the trend average of trend.
As we could see in the earlier example, above, the last trend, the price at which lower end of the trend had not moved enough to push the upper end above the trend line, had moved too slow.
That tells us that we’ll need to move on our price predictions for the lower end of the trend to make them a little less uncertain, but it
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