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If you can’t measure it, don’t trade it – Quantifying Trends


The idea of finding a reference

If I were to tell you that ^NIFTY50 is going up, does it mean anything? 

I am sure you would ask me, how long has it been going up for? For the past 10 minutes, 1 hour or 1 month. Do you see where I am going with that? 

You need a reference to compare the current price, in the absence of which we cannot claim if the price has increased or decreased. 

To solve this problem, in time-series data analysis, statisticians came up with the concept of Moving Averages . . .

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