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Transcript
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Transcript
You have been going for a morning walk every day. Now let’s say you want to know how consistent your daily morning walk has been for the past few months. If you check just today’s step count, it won’t tell you much. Maybe you walked about 10,000 steps today, but you skipped yesterday. So instead you take the average of your last 200 days step count. That gives you a better idea of your overall performance. That’s exactly what the 200 day moving average. That’s for stocks. It’s a simple line on a chart that shows the average price of a stock over the last 200. Trading days. If the stock price is above this line, it means the stock is in a strong upward trend. But if it goes below the line, it signals weakness or a downtrend. Now why does it even matter? Because it helps investors see the bigger picture and not just the daily ups and downs. It also acts like a safety line. Many investors sell when the price drops below it to avoid big losses. Even large institutions track it to check if the overall market is strong or weak. In short, the 200 day moving average is like a fitness. Taco but for stocks. Share this with that friend who’s trying to understand the market and follow your securities for more such financial insights. Investment in securities markets are subject to market risks. Read all related documents carefully before investing.