10-day average overview
The ten-day moving average is one of those indicators that everyone knows. From the new trader to the experienced 30-year veteran.
What makes it so popular?
The quick answer is that it is easy to understand and tracks fantastic price movement.
In this article, I will talk about the ten-day moving average and how it applies to trading. The article will focus heavily on daily trading, but these principles can be applied to any period of time.
How the ten-day moving average is calculated
The 10-day moving average is something that comes out of elementary school, again, which is what makes it so fantastic.
The average is based on the closing price of a security over the last ten periods. You can check out this online moving average calculator here if you want to do the calculations yourself. 
10-period simple moving average formula
Closing price of the day 1: 100
Closing price for the day 2: 102
Closing day of the day 3:99
Closing day of the day 4: 104
Closing day of the day 5: 103
Closing price of the day 6: 107
Closing price of the day 7: 105
Closing price on the day 8: 110
Closing day of the day 9: 111
Day 10 Closing price: 112
Once you add up all these closing prices and divide by 10, you get $ 105.3. Well, now that you’re comfortable with math, let’s complicate things up a bit.
Different types of 10-day moving averages
The world of technical analysis would not exist if there were no people trying to complicate things. The ten-day moving average is not immune to this problem.
These additional ten-day moving averages go beyond the scope of this post, so I won’t dive deep, but I want to make you aware of their existence.
10-day exponential moving average
The exponential moving average uses SMA as the basis of the calculation and applies a smoothing factor. The EMA is for traders who want to reduce the delay of the simple moving average. 
10-day weighted moving average
The weighted moving average applies more weight to the most recent price action of the formula. It is similar to the exponent, except that it is not a softening factor. Therefore, you can set the indicator according to which periods weigh the most.
For example, if you want to create more delay, you could even give more weight to historical periods and not to more recent ones.
[Video] How to add the simple ten-period moving average to the chart
Below is a quick video on how to add a simple ten-day moving average to the chart.
When is the best time to use the ten-day moving average?
The ten-day moving average is an indicator that follows the trend. This means that the indicator will not tell you where the price is going, but gives you an insight into the security trend.
Up to this point, it is best to use the moving average of ten periods to assess the health of a moving stock.
in the morning, the actions will tend and will tend strongly. This is where ten-period SMA comes in handy. This is because the ten-day moving average keeps you close to the action. If you used a 20 or 50 day moving average, it would give the shareholder too much leeway to go against you.
Morning is a fun time at the market. Stocks move in virtually the same patterns.
If there is a decline or decline in stocks, they will run from the open until 10:30 a.m. and sometimes until about 11:30 a.m., but then something will happen.
The volume begins to dry out and the intervals of the periods begin to decrease. This pause of the action can take the form of side action for the rest of the day or the action can make a move to test its highs between 1pm and 2pm.
Still, strong movements are likely to be made during the day.
This top Google pattern is what appears on the market every day.
As an active trader or active trader, the ten-day moving average closely tracks price action. This ensures that if you are an impulse trader, you will only stay in one position if you move in the desired direction.
Once you see the broken moving average at the bottom, you can close the position or at least lighten the size.
The moving average also works in short operations.
It’s literally the same configuration, just the reverse.
In this example, GLUU, which is a fairly volatile stock, had a good breakdown in the morning. Shares remained below the ten-period SMA until the 11:30 a.m. time zone before moving away.
When can your ten-day moving average fail?
Late tickets to Breakouts
The ten-day moving average is a lagging indicator. This means that the indicator will be of no use to you in anticipating a significant price change. By the time the average reaches the price, you would have already lost the move.
Up to this point, you will need to use other technical indicators to determine when you want to start a transaction, such as price action.
So if you’re waiting for a moving average signal before you get into a leak or breakdown in the morning, you’ll be behind the eight ball.
Side markets are a slow pace for systems that follow the trend. The reason is that side markets do not have a real trend. These configurations are reduced to the purchase of assistance and the sale of elevated products.
However, moving averages within intervals are a disaster. 
The price will cross the averages several times as it rises to the resistance and retreats to bear.
Therefore, it is not a good idea to base the exits on moving average crosses.
A graphic example of UBER is shown at the top. As you can see in this 5 minute chart, once in a trading range, the price action moves above and below the average easily and gives no clear direction on how the price will break.
[Video] Comparison of different moving average periods
As mentioned earlier in this article, there are different types of averages. But there are also different periods.
A general rule of thumb is that you want to use a shorter period of time (1 or less) to measure short-term movements. That is why, so far, in this article, we have discussed morning operations and impulse configurations as we are using ten-period SMA.
However, if you want to change intermediate trends, you will want to use the moving average of 20 or even 50 periods.
Lastly, if you’re looking for long-term trends, you’ll want to outperform them for up to 100 or even 200 periods.
In the following video, we’ll look at the differences between the 10-period SMA and the 100-period SMA when watching Netflix. This is a trade broken down in the morning.
How can Tradingsim help?
If you are interested in trading with the ten-day moving average, try using the Tradingsim indicator. We have a market reproduction platform that allows you to exchange real data from the last two years.
Below you can see if the indicator is right for you and your trading style.
- Simple mobile calculator. wpcalc.com
- Some techniques used in technical analysis. The University of Notre Dame. p. 2
- Trade with moving averages. Futures RJO
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