Moving Average

Moving averages are among the most popular technical indicators, used to identify trends and potential support/resistance levels. They calculate the average price over a specific number of periods, creating a smooth line that filters out short-term fluctuations. The two main types are Simple Moving Average (SMA), which weights all periods equally, and Exponential Moving Average (EMA), which gives more weight to recent prices. Traders commonly use combinations like the 50-day and 200-day moving averages to identify golden crosses (bullish) and death crosses (bearish). Moving averages can act as dynamic support and resistance levels and help confirm trend direction.