3. Momentum - Moving Average Spread
Moving Average Spread (MA Spread) Overview
Definition: The Moving Average Spread (MA Spread) is a critical metric that measures the variance between the current market price and a selected moving average. It serves as a fundamental tool for assessing the market's directional momentum.
Comparison with Smooth Charts: Similar to Smooth Charts, the MA Spread employs a moving average. However, while the Smooth Spread typically utilizes a 5-period length and the Smooth Chart a 10-period length, the MA Spread maintains a standard 15-period moving average setting. This setup allows traders to analyze moving average spreads from three distinct perspectives across 15 different time frames.
Directional Clarity:
Upward Momentum: When the last price exceeds the chosen moving average length, it signifies upward momentum in the market.
Downward Momentum: Conversely, when the last price falls below the selected moving average length, it indicates downward momentum in the market.
More Information on the moving average spread trading model -
Momentum - Moving Average Spread | Settings
In the Online Trading Solutions Market Pulse App, the Moving Average Spread feature offers a range of customization options to align with individual trading preferences. Here's a detailed breakdown of the settings you can personalize for the Moving Average Spread:
1. Show Moving Average Spread:
This option lets you toggle the display of the Moving Average Spread on or off. It's useful for traders who want to focus on specific types of data or simplify their chart analysis.
2. Show High/Lows:
Choose whether to include the display of high and low values alongside the Moving Average Spread. This can be particularly helpful for traders who consider price extremes in their market analysis.
3. MA Length (Average):
Set the desired length for calculating the moving average. This length determines how sensitive the Moving Average Spread is to recent price movements and can be adjusted to suit different trading styles and timeframes.
4. Warning Threshold:
Specify a threshold value for the Moving Average Spread. When the spread is 1 point above or below this value, the app displays a warning color (typically yellow) to alert traders of significant deviations.
5. Positive Value Color:
Customize the background color for situations where the Moving Average Spread is above the warning threshold. This color setting helps in quickly identifying bullish market conditions or potential buy signals.
6. Negative Value Color:
Similarly, select a background color for when the Moving Average Spread is below the warning threshold. This color can indicate bearish conditions or potential sell signals.
By tailoring these settings, traders can enhance their interaction with the Market Pulse App, ensuring that the Moving Average Spread feature provides data visualization that aligns with their specific strategies and market perspectives. This level of customization is instrumental in making the app a valuable tool for diverse trading approaches.