Chart analysis: What does this mean: 200 period moving average?
In a chart analysis I read the sentence the red 200 period moving average can be
seen rising from the lower left of the chart.
I know what a moving average is, but what is meant by the 200 period? Is this the window the average is taken from, i.?e. the average of 200 days (or hours or whatever the chart’s x axis showed, I don’t remember).
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For each day or hour (whatever is plotted in the charts x-axis), the algorithm goes back 200 days and calculates the average of these values. If it is a 30 day moving average, 30 previous days are taken into account for each day on the x-axis.
This is the average closing price for the 200 days prior to the date on the X axis.
200 period moving average means the average over the last 200 units the chart is in.
So if you are looking at a weekly chart the period is weeks, if you are looking at a daily chart the period is daily, if you are looking at an hourly chart the period is hourly, etc.
"Periods" can be weeks, days, hours, whatever.
But whatever "period was chosen, the chart has the average of say, the Dow Jones Index value for the "last" 200 of those, and when there is new one, it adds that and drops the one furthest back to create a new average.
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