Look at the picture below, from this picture SMA 480 (Magenta), SMA 120 (Lime) and SMA 24 not in flat condition, thus we add SMA 8 and SMA 4 to see EU movement during 4 and 8 hour, and open buy is taken if SMA 4 is above SMA 8, so that its follow the SMA 24, SMA 120 and SMA 480 trend.
Sell is taken if price have been reach BB 96, then followed by SMA 4 position still below of SMA 96, for more ensure that GJ will up or down again, see SMA 4 open and close next candle.
3. Example from H1 Time Frame AUD/JPY case
Look at M 15 chart below, SMA 1920 (Magenta) which is describe monthly movement being in flat condition, see also Upper and Lower Line BB 1920 position (dashed magenta).
SMA 96 (daily) and SMA 480 (weekly) in sharply pointing down, but based on knowledege before about flay position, so buy is taken with assumtion that the price will move in upper - lower BB 1920 area. Certainty next movement direction can be observed with open/close SMA 16.
But if the price move down (SMA 16 open/close is crossed down) in reality dan price reach through lower BB1920 and then not reversal so sell is taken, but if the price is reversal, sell position then close and open buy in new position.
Now, we should be able to understand how the observed price movements based on the average movement was observed on the basis of reference points that have been determined. Average calculation method recently in fact been highly developed, the objective is to seek a more cautious approach to the movement of a group of data.
Actually KG tend to choose Weighted Moving Average methode for analyze movement of a group of data that observed. Because this methode is use weighting technique in calculation.
When we have home and wanted to sell it of course we will be more inclined to see the price of houses around us in the nearest time and use it as a reference, we may not see the price ten years ago and use it as reference to determine the home price that you will sell.
Next, i will post LWMA methode for analyze.
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