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Displaced Moving Average

Posted By: TradersLog

Displaced Moving Averages allow you to shift or center the moving average on a price chart. A trader specifies the length for one or more moving averages, then selects the number of intervals to displace the moving average. The underlying mathematics of a moving average ensures that it lags the actual price data. Centering the moving average provides a more accurate picture of the moving average relative to the current price on the chart. The DMA is useful in de-trending price data, in locating and estimating cycles, and as a simple moving average trading system.

Displaced Moving Average

Chart courtesy of Prophet Financial Systems (www.prophet.net)

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