
The rising moving average is a technical indicator used in
stock market trading. Most commonly found visually, the pattern is spotted with a moving average overlay on a stock chart or price series. When the moving average has been rising consecutively for a number of days, this is used as a buy signal, to indicate a rising trend forming.
While the rising moving average indicator is commonly used by
investor
An investor is a person who allocates financial capital with the expectation of a future Return on capital, return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some specie ...
s without realising, there has been significant backtesting on historic stock data to calculate the performance of the rising moving average. Simulations have found that shorter rising averages, within the 3- to 10-day period, are more profitable overall than longer rising averages (e.g. 20 days). These have only been tested on US
equity stocks however.
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Notes
Mathematical finance
Time series
Technical indicators