SMA, Exponential Moving Average, Linear Weighted Moving Average and SMMA

There are four types of gold trading moving averages:

1. Simple gold trading moving average
2. Exponential gold trading moving average
3. Smoothed gold trading moving average
4. Linear weighted gold trading moving average

The difference between these 4 gold trading moving averages is the weight assigned in to the most recent xauusd price data.

SMA XAUUSD Indicator

Gold Simple Moving Average indicator applies equal weight to the gold trading data used to calculate the simple moving average and is calculated by summing up the xauusd price periods of a gold chart and this value is then divided by the number of such xauusd price periods. For example gold trading simple moving average 10, adds the xauusd price data for the last 10 xauusd price periods and divides them by 10.

EMA XAUUSD Indicator

Gold Exponential Moving Average indicator applies more weight to the most recent xauusd price data and is calculated by assigning the latest xauusd price values more weight based on a percent P, multiplier that is used to multiply and assign more weight to the latest xauusd price data.

LWMA XAUUSD Indicator

Gold Linear Weighted Moving Average indicator moving averages applies more weight to the most recent xauusd price data and the latest data is of more value than earlier xauusd price data. Linear Weighted gold trading moving average is calculated by multiplying each of the gold trading closing gold prices within the series, by a certain weight coefficient.

SMMA XAUUSD Indicator

Gold SMMA Indicator is calculated by applying a smoothing factor of N, the smoothing factor is composed of N smoothing for N xauusd price periods.

The gold chart example illustrated and explained below shows Simple Moving Average, Exponential Moving Average and Linear Weighted Moving Average. The SMMA gold trading moving average is not commonly used so it is not shown below.

The Linear Weighted Moving Average gold indicator reacts fastest to xauusd price data, followed by the Exponential Moving Average and then the SMA.

SMA, Linear Weighted Moving Average, Exponential Moving Average - Types of Gold Moving Averages - Simple Moving Average, Exponential Moving Average and LWMA

Day Trading Gold with Exponential and Simple Moving Averages

The Simple Moving Average and Exponential Moving Average gold trading moving averages are the most commonly used Moving averages to trade gold. Whereas the Exponential Moving Average gold trading moving average has a more sophisticated method of calculation, its more popular than the Simple Moving Average gold trading moving average.

Simple Moving Average is the arithmetic mean of the closing gold prices in the xauusd price period based on the set time period where each time period is added and then it is divided by the number of time xauusd price periods chosen. If 10 is the xauusd price period used the xauusd price for the last ten xauusd price periods added up then it is divided by 10.

SMA gold indicator is the result of a simple arithmetic average. Very simple and some Gold traders tend to associate with the gold trend since it closely follows xauusd price action.

EMA on the other hand uses an acceleration factor and it is more responsive to the xauusd trend.

The Simple Moving Average gold trading moving average is used in gold charts to analyze xauusd price action. If the xauusd price action in more than 3 or 4 time xauusd price periods the Simple Moving Average then it's an indication that long xauusd trades should be closed immediately and the bullish momentum of the buy gold trade is waning.

The shorter the Simple Moving Average xauusd price period the faster it is to respond to xauusd price change. Simple Moving Average gold indicator can be used to show direct information regarding the gold trend of the xauusd market and the strength by looking at its slope, the steeper or more pronounced slope of the Simple Moving Average is, the stronger the Gold trend.

The Exponential Moving Average is also used by many gold traders in the same way but it reacts faster to the xauusd market moves and therefore it is more preferred by some xauusd traders.

The Simple Moving Average and Exponential Moving Average can also be used to generate entry and exit points when gold trading. These Moving averages can also be combined with Fibonacci and ADX gold indicators to generate confirmation the gold signals generated by these moving averages.