Tag
Indicators
4 articles
- Trading
What a moving average shows
A moving average is the mean of the last N prices. When a new price arrives, the oldest price drops out of the window and the average is calculated again.
- Trading
What a candlestick shows
A candlestick records the open, high, low, and close for one interval. The body is the open-to-close move, and the wicks mark prices outside that body.
- Trading
A forming candle is not a closed candle
A forming candle is still changing. Its high, low, and close are final only after the interval ends. Using the eventual close early is look-ahead bias.
- Trading
An indicator is not a strategy
An indicator turns price into a number. A strategy is the rule that decides what to do with that number, including the entry, the exit, and the stop loss.