Question 1d Advantage and disadvantage of Moving Average

Question 1d

Advantage and disadvantage of Moving Average

The SMA is the most straightforward calculation, the average price over a chosen time period. The main advantage of the SMA is that it offers a smoothed line, less prone to whipsawing up and down in response to slight, temporary price swings back and forth. Therefore, it provides a more stable level indicating support or resistance.

Disadvantage

The SMA’s weakness is that it is slower to respond to rapid price changes that often occur at market reversal points. The SMA is often favored by traders or analysts operating on longer time frames, such as daily or weekly charts.

Advantage and disadvantage of Exponential Moving Average

The advantage of the EMA is that by being weighted to the most recent price changes, it responds more quickly to price changes than the SMA does. This is particularly helpful to traders attempting to trade intraday swing high.............