![]() ![]() Alas, laziness may have led to 1970-1980s chartists merely borrowing from these proven weekly settings for their parameters as the pace of trading increased and chartists began using daily charts. Many modern investors often wonder about the numerical significance of the 50-day and 200-day moving averages. The trading of stocks started to occur more rapidly in the late 1970s and 1980s as aggressive baby boomer stockbrokers pushed the boundaries of old traditions, often coming up with more aggressive, more frequent trading ideas that generated more commissions for themselves and their companies. When the baby boom generation started their careers and began saving for retirement in the late 1970s, millions of stockbrokers were added to the workforce to handle all those new investors. Investors sometimes used the 200-week moving average as a very-long-term measure that represented four years of stock-price action. The 50-week moving average represents one year of price action because there are 50 weeks in a 'market year' (i.e., 52 weeks in a calendar year and the NYSE and other exchanges usually have ten days off for holidays = 50 weeks). ![]() Most considered the 20-week moving average to be an intermediate-term measure that encompassed five months, while the 50-week moving average was a long-term measure of the status of prices. The 20, 50, and 200-period averages were applied initially to weekly charts. Because trading was much slower before the 1970s (trades occurred, on average, only about once a year), if investors used charts at all, they were used with monthly or (rarely) with weekly settings. The stock market used to be a far more slow-moving machine than it is in today's fast-paced, computer-driven times.
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