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Consider a situation where your sales have been quite stable in the month, but you have done exceptionally better in the past two days. what trendline is more sensitive to this change?

Sagot :

The trendline has a positive slope and 3-day moving average is the trendline that is more sensitive to this change.

In this question,

Trendlines are used to give traders a good idea of the direction an investment's value might move. In a healthy trend, it's ideal to enter your trades on a pullback (towards the moving average).

Understanding the direction of an underlying trend is one of the most basic ways to increase the probability of making a successful trade because it ensures that the general market forces are working in your favor.

A moving average is a technical indicator that investors and traders use to determine the trend direction of securities. It is one of the commonly used technical tools best known as trend following or lagging indicator, because it is based on past prices.

The sales have been quite stable in the month, but the sales was exceptionally better in the past two days. If the analyst draws a line between these price points, they have an upward trend and 3-day moving average is the trendline that is more sensitive to this change.

Hence we can conclude that the trendline has a positive slope and 3-day moving average is the trendline that is more sensitive to this change.

Learn more about trendlines and moving averages here

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