What is Median?

For every set, the median is the center value in the middle. That's
where half of the statistics are more and the other half of the
statistics are less. The median is the most precise statistical
measure to evaluate. The data must be first sorted in ascending
order to measure the median and the middlemost value of the set is
the median.

The size of the set affects the estimation of the median. In an odd
number set, the median is the middle number and for an even
number set, the mean is the average of the two middle numbers.

When there are extremes in the series that could affect the average
of the numbers, the median can sometimes be utilised instead of
the mean. Exceptions have less of an impact on the median of a
series than on the mean.

The word Ogive is a term used in architecture to describe curves or curved

shapes. Ogives are graphs that are used to estimate how many numbers lie below
or above a particular variable or value in data. To construct an Ogive, firstly, the
cumulative frequency of the variables is calculated using a frequency table. It is
done by adding the frequencies of all the previous variables in the given data set.
The result or the last number in the cumulative frequency table is always equal to
the total frequencies of the variables. The most commonly used graphs of the
frequency distribution are histogram, frequency polygon, frequency curve, and
Ogives (cumulative frequency curves).

Ogive Definition

The Ogive is defined as the frequency distribution graph of a series. The Ogive is a
graph of a cumulative distribution, which explains data values on the horizontal
plane axis and either the cumulative relative frequencies, the cumulative
frequencies or cumulative per cent frequencies on the vertical axis.
Cumulative frequency is defined as the sum of all the previous frequencies up to
the current point. To find the popularity of the given data or the likelihood of the
data that fall within the certain frequency range, Ogive curve helps in finding
those details accurately.

Create the Ogive by plotting the point corresponding to the cumulative frequency
of each class interval. Most of the Statisticians use Ogive curve, to illustrate the
data in the pictorial representation. It helps in estimating the number of
observations which are less than or equal to the particular value.

Ogive Graph

The graphs of the frequency distribution are frequency graphs that are used to
exhibit the characteristics of discrete and continuous data. Such figures are more
appealing to the eye than the tabulated data. It helps us to facilitate the
comparative study of two or more frequency distributions. We can relate the
shape and pattern of the two frequency distributions.

The two methods of Ogives are:

Less than Ogive

Greater than or more than Ogive

Less than and More than Ogive curve

The graph given above represents less than and the greater than Ogive curve. The
rising curve (Rose Curve) represents the less than Ogive, and the falling curve
(Purple Curve) represents the greater than Ogive.
Less than Ogive

The frequencies of all preceding classes are added to the frequency of a class. This
series is called the less than cumulative series. It is constructed by adding the first-
class frequency to the second-class frequency and then to the third class
frequency and so on. The downward cumulation results in the less than
cumulative series.

Greater than or More than Ogive

The frequencies of the succeeding classes are added to the frequency of a class.
This series is called the more than or greater than cumulative series. It is
constructed by subtracting the first class, second class frequency from the total,
third class frequency from that and so on. The upward cumulation result is
greater than or more than the cumulative series.

Ogive Chart

An Ogive Chart is a curve of the cumulative frequency distribution or cumulative

relative frequency distribution. For drawing such a curve, the frequencies must be
expressed as a percentage of the total frequency. Then, such percentages are
cumulated and plotted, as in the case of an Ogive. Below are the steps to
construct the less than and greater than Ogive.

Uses of Ogive Curve

Ogive Graph or the cumulative frequency graphs are used to find the median of the given
set of data. If both, less than and greater than, cumulative frequency curve is drawn on the
same graph, we can easily find the median value. The point in which, both the curve
intersects, corresponding to the x-axis, gives the median value. Apart from finding the
medians, Ogives are used in computing the percentiles of the data set values.
Moving Averages

In fast-moving markets, it can often be observed that the price of a stock is

skyrocketing, only to plummet sometime later. These significant inconsistencies can
potentially create false signals.

Moving averages help to filter out the noise from such volatile price movements and
act as trend-following indicators.

What is a Moving Average (MA)?

A moving average is a commonly used technical analysis tool used to smooth out
price data and obtain an average value.

Moving averages are computed to determine a stock's trend direction or support level
and resistance levels.

Primarily, when the price level of a stock rises above the moving average line, traders
consider it as an indication to buy. And when the price falls below this line, traders
contemplate it as a signal to sell.

Different Types of Moving Averages

Primarily, there are three moving average types, and they are explained below-

 Simple Moving Average

A simple moving average or SMA can be a plot by calculating the average price of a
stock over different time frames. These are mainly formed based on the closing prices.

Formula for Calculating the Simple Moving Average-

This can be cited better with a moving average example.

The first requirement for calculating simple moving averages is to find out the
average prices of a given period and then divide their sum by the total number of
periods.

Let’s say Robin wants to calculate the simple moving average for XYZ Stock by
considering the closing prices of the last 5 days.

The closing prices of the last 5 days are given by Rs. 24, Rs 25.50, Rs. 24.75, Rs
25.10 and Rs 24.60

The SMA can be computed as given below:

SMA = Rs. (24 + 25.50 + 24.75 +25.10 + 24.60) / 5

Therefore, SMA= Rs. 24.79

 Weighted Moving Average

A weighted moving average (WMA) counters the various drawbacks of SMA. It puts
more weight on recent data instead of the past. WMA follows the different price
levels of stock more strictly than SMA.

Formula for Calculating the Weighted Moving Average-

 Exponential Moving Average

Also referred to as EMA, this involves complex calculations. Similar to

WMA, EMA puts more weight on the latest prices of a financial instrument.

If a 100-day EMA and a 100-day SMA are plotted on the same chart, it can be seen
that the former reacts faster than the latter. This happens due to greater emphasis on
the recent prices.

Formula for Calculating the Exponential Moving Average-

Difference Between Simple Moving Average (SMA) vs

Exponential Moving Average (EMA)
Given below is a tabular representation showing how exponential and weighted
moving averages are different from simple moving averages-

Point of Difference SMA EMA and WMA

Response to price changes SMA is slow to respond to price EMA and WMA respond faster to
changes. changing prices.

Weight on recent periods It gives equal weight to all These put more weight on recent
periods. periods.

Emphasis on traders’ actions It doesn’t emphasise on traders’ These emphasise on what the traders
actions. are doing at the moment.

Ability to reflect a quick shift SMAs are efficient in reflecting a These possess the ability to
in market sentiment. quick shift in sentiment. reflect shifts in market
sentiment.

Importance of Moving Average Method

The direction of a moving average line assists the trader in understanding which way
the price of a financial instrument is moving.

If the price of a financial instrument is above the moving average line, it is said to be
on an uptrend. On the flip side, if its price is under the moving average line, it’s on a
downtrend.
If the moving average line of a stock doesn’t show any vertical movements for a long
period of time, it indicates that the stock price is ranging and not trending. This is
observed when a stock is traded between constant high and low prices for a certain
period.

Moving averages also work as support and resistance indicators for traders. Most
times, the price of stock finds support at the moving average line when the trend is up.
Conversely, it meets with resistance at the line when the trend is down.

Also known as a lagging indicator, a moving average line is based on previous closing
prices. Hence, instead of giving a warning beforehand, it will only confirm a change
in trend.

Merits of Moving Average Method

 Moving averages help in identifying the trends. This allows the traders to avail
of and understand the trends established in the market.

 It also acts as a support system as it helps in determining potential price

support.

 It provides the support to measure the momentum as well. It helps to determine

the direction and strength of the asset’s momentum.

Demerits of Moving Averages

Although calculating moving average offers a quick and easy way to identify trends of
financial instruments, they have the following disadvantages:

 Since each stock or commodity has its unique price history, no set rules can be
implemented across all markets. Hence, a moving average cannot show the
constant changes in their prices.

 The primary purpose of identifying a trend is to predict the future values of the
stock. But, if the security does not trend up or down, calculating moving
averages will not be able to provide the traders with an opportunity to profit.

 Stocks often tend to show a cyclical behavioural pattern that cannot be

interpreted by a moving average.

 Moving averages have the ability to be spread out over different time frames,
but this can become quite tricky in specific situations.

 Similar to other technical analysis methods, moving averages do not consider

the changes in primary factors that have an effect on the market price of a
stock. Changes in the managerial structure of a company, changes in product
demand of industry are also not taken into account
 function is called periodic if it repeats itself over and over again at
regular intervals.

Formally, a function f� is periodic with period T� (where T>0�>0)

if f(x+T)=f(x)�(�+�)=�(�) for all x�. The smallest such positive T� is
called the least period (or often just “the period”) of the function.
(If f� is a constant function, then it is periodic with every possible
period, but it doesn’t have a “least period”.)

A periodic function or cyclic function, also called a periodic waveform (or

simply periodic wave), is a function that repeats its values at regular intervals or periods.
The repeatable part of the function or waveform is called a cycle.[1] For example,

the trigonometric functions, which repeat at intervals of radians, are periodic

functions. Periodic functions are used throughout science to describe oscillations, waves,
and other phenomena that exhibit periodicity. Any function that is not periodic is
called aperiodic.