How To Use Moving Averages

There are tons of ways to use moving averages.

In this #developyouredge episode, I’ll share how to determine which type of moving average to use and how to use them in our trading strategies.

There are two types of moving averages:

SMA (Simple Moving Average) is a calculation that takes the arithmetic mean of a given set of prices over a specific number of days in the past.

EMA (Exponential Moving Average) is a weighted average that gives greater importance to the price of stock, crypto, or future in more recent days, making it an indicator that is more responsive to new information.

The EMA gives a higher weighting to recent prices while the SMA assigns an equal weighting to all values.

How do I use moving averages?

It’s really personal. Like with any indicator or tool out there that you use, it’s personal on how you use it in your trading strategies.

For me, I like to keep things super simple.

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Develop Your Edge is a weekly YouTube show hosted by 23-year futures veteran and CME member Anthony Crudele, an ex-pit trader and one of the first to trade the E-Mini S&P. Each week Anthony and his guests discuss what they are doing to Develop Their Edge in trading futures! Past performance is no guarantee of future results.  Derivatives trading is not suitable for all investors.

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