Moving Averages
figure 11.2 Centered versus Non-Centered Moving Averages on the 4-Hour Chart
of the Nikkei 225.
Source: MetaTrader 4
As we will learn from cycle analysis in Chapter 20, the middle of any N-period
number of bars is found using (N + 1) ÷ 2, rounding up to the closest integer if N is
even. Let us now locate the middle N periods using the formula (N + 1)÷2 and com-
pare that with shifting back by half of N periods using (N − 1) ÷ 2. Figure 11.3 proves
that both calculations refer to the same bar, which represents the middle of 10 periods.
Finally, centered moving averages with very large periodicities tend to move
through the central region of price activity, representing a kind of central valuefigure 11.3 Finding the Middle of N Periods versus Shifting Back Half of N Periods.