We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.2023-10-06 19:00:08The 200 day moving average is a technical indicator used to analyze and identify long term trends. Essentially, it is a line that represents the average closing price for the last 200 days and can be applied to any security.
Each new day creates a new data point. Connecting all the data points for each day will result in a continuous line which can be observed on the charts.The 200 day moving average has gained in popularity as it can be used in many different ways to assist traders.The 200 day moving average can be used to identify key levels in the FX market that have been respected before.
Incorporating shorter term moving averages like the 21, 55 and 100 day moving averages, allows traders to determine whether the existing trend is running out of steam because they track more recent price movements over a shorter time period.chart below, shows how the smaller, faster moving averages signal that the uptrend may be about to reverse. The 21 day moving average crosses through the 55 day moving average and continues to cross the 100 and 200 day moving averages to the downside.
Due to its mass adoption, the 200 day moving average can often be considered a self-fulfilling prophecy.