Moving averages are very simple, yet extremely useful tools for traders. A moving average is simply the average of a series of numbers over a period of time which is constantly updated by dropping the oldest value and then adding the newest value and recalculating the average. So a 5-day moving average of a commodity would be a sum of the closing prices for the last 5 days divided by 5. After the next trading day, we would drop the oldest day’s closing price and calculate the average with the latest day’s price in its place. So over time, the average moves as new data is added and old data are dropped off.
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Greg Perlin
Senior Commodities Broker
Greg is a former Chicago Board of Trade member. He was an independent floor trader, pit broker and floor broker with Cantor Fitzgerald. Some of his clients included traders from Morgan Stanley and Lehman Brothers. He also acted in the capacity of desk manager for the morning trade desk. Greg was part of the elite Lind Plus Division for 10 years before joining RJO Futures in 2011..... Read More
