Moving averages can be calculated on any data series including a security's open, high, low, close, volume, or another indicator. A moving average of another moving average is also common. The only significant difference between the various types of moving averages is the weight assigned to the most recent data. Simple moving averages apply equal weight to the prices. Exponential and weighted averages apply more weight to recent prices.
Triangular averages apply more weight to prices in the middle of the time period.
And variable moving averages change the weighting based on the volatility of prices. The most popular method of interpreting a moving average is to compare the relationship between a moving average of the security's price with the security's price itself. A buy signal is generated when the security's price rises above its moving average and a sell signal is generated when the security's price falls below its moving average. Also displayed is a 15-month simple moving average. This type of moving average trading system is not intended to get you in at the exact bottom nor out at the exact top.