How Can I Measure the Distance between the Close and a Moving Average? (video)


There are two ways to measure the distance between a price point and a moving average. First, chartists can simply use the "percentage change" tool when annotating a chart. This tool can be found right under the "auto support-resistance" tool. Note that you can hover over any icon with a small triangle in the right corner to reveal other icons. Select the percentage change tool, move to the moving average, click and drag the tool to the price point. The example below shows the percentage change tool extending from the 200-day simple moving average and the 50-day exponential moving average. 

Chartists can also use the Percentage Price Oscillator (PPO) to measure the distance from the close or last price and an exponential moving average. Simply set the PPO to (1,50,1). The first "1" represents a 1-period EMA, which is just the close or last price. The "50" represents the 50-day EMA. The other "1" is for the signal line. Setting the signal line at 1 simply hides it. The PPO measures the percentage difference between two exponential moving averages. In this case, we are measuring the distance between the 1-day EMA and the 50-day EMA, which is around 3.1%. 

Arthur Hill
About the author: , CMT, is a Senior Technical Analyst at He has written articles for numerous financial publications including Barrons and Stocks & Commodities magazine. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed technician. In addition to his CMT designation, Arthur holds an MBA from the Cass Business School at City University in London. Learn More
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