Explain the importance of moving averages in the forecasting of a business cycles
Answers
Moving averages are the calculations of the change in the data.This change is shown in the series of data or averages that is called moving mean.The importance of MOVING AVERAGES in the forecasting of a business cycles is:
• Moving averages used to determine the past price of goods that effects the would be success.
• Moving averages help the traders, marketers to track the trends of financial assets by smoothing out the day-to-day price and fluctuations.
• Moving averagesplays a critical role to make trends work in trader's favor.
Moving averages in forecasting of a business cycle has an important role to play as a moving average can smooth out the noise of random outliers and emphasize long-term trends to work in their favour and increase the number of winning trades.
The fundamental assumption of technical analysis of moving averages holds that past performance and can inform future movements.