Forex

Each price is a snapshot of the current mass consensus of value (see Section
12). A single price does not tell you whether the crowd is bullish or bearish-
just as a single photo does not tell you whether a person is an optimist
or a pessimist. If, on the other hand, someone brings ten photos of a person
to a lab and gets a composite picture, it will reveal that person's typical features.
If you update a composite photo each day, you can monitor trends in
that person's mood.
A moving average is a composite photograph of the market - it combines
prices for several days. The market consists of huge crowds, and a moving
average identifies the direction of mass movement.
The most important message of a moving average is the direction of its
slope. When it rises, it shows that the crowd is becoming more optimisticbullish.
When it falls, it shows that the crowd is becoming more pessimistic-
bearish. When the crowd is more bullish than before, prices rise
above a moving average. When the crowd'is more bearish than before, prices
fall below a moving average.