Moving Average Ribbon on a Live Gold Chart

What it shows

Four lines over the candles, one per row, all simple averages of the close by default. The 20 line hugs price and the 200 line is the slowest. Each row has its own checkbox, so any of them can be hidden.

How Pravex works it out

1. Each of the four rows has a checkbox. A row that is off draws nothing and costs nothing.
2. For every row that is on, take its source and average it over its own length with its own type: SMA (plain average), EMA, SMMA (RMA), WMA or VWMA.
3. The rows do not share anything. Each line starts on the candle where its own window is first full, so the 200 line appears last.
4. VWMA weighs each close by its volume. Spot gold candles carry none, so on this chart use one of the other four types.

Settings

Setting	Default	What changing it does
First line	On, SMA of close, 20	The first and quickest line. The checkbox turns it on or off, and the row also holds its average type, its source and its length.
Second line	On, SMA of close, 50	The second line, with its own checkbox, type, source and length.
Third line	On, SMA of close, 100	The third line, with its own checkbox, type, source and length.
Fourth line	On, SMA of close, 200	The fourth and slowest line, with its own checkbox, type, source and length. Types you can pick on any row: SMA, EMA, SMMA (RMA), WMA, VWMA.

How traders read it

Order is the first thing to look at. When the fast line is on top and the slower ones sit below it in order, with price above them all, every horizon is pointing up. The reverse stack with price underneath says every horizon is pointing down.

Spacing is the second. A ribbon that fans out means the short averages are pulling away from the long ones, so the move has legs at every scale. Lines that bunch together or twist over each other say the trend is gone or turning.

On 4-hour gold candles the 200 line covers several weeks of trading. Weekend gaps in the data do not create candles, so the lines count only candles that exist.

When it misleads

Every line is built from past closes, so the whole ribbon lags, and the slowest line lags most. By the time the order flips from up to down, much of the move has already happened. In a sideways market the lines tangle and cross each other constantly, which looks busy and says little. Four lines also make a cluttered chart on a small screen, so switch off the rows you do not use.

Questions and answers

What is a moving average ribbon?

It is several moving averages of different lengths drawn together. Here there are four, and each can have its own type, source and length.

Which lengths should a ribbon use?

Pravex starts at 20, 50, 100 and 200, all simple averages of the close. Those are common reference lengths. Shorter sets, such as 10, 20, 30 and 40, make a tighter ribbon that reacts quicker.

Can I mix average types in the ribbon?

Yes. Each row has its own type, so one line can be an EMA while another is a WMA. Leave VWMA for markets with volume such as bitcoin; on gold it has nothing to weight by.

Why does the 200 line appear so late?

Each row starts only when its own window is full, so the 200 line needs 200 loaded candles. On 1-hour gold that is around nine trading days; scroll back for more history if it is missing.

Related: Simple Moving Average, MA Cross, Moving Average Exponential, Bollinger Bands, every indicator.