Moving Average

A moving average (MA) is a technical indicator that smooths price data by calculating the average closing price over a specified number of periods. Common types include the Simple Moving Average (SMA), which weights all periods equally, and the Exponential Moving Average (EMA), which gives greater weight to recent prices. Moving averages help traders identify trend direction, dynamic support and resistance levels, and potential crossover signals. A short-period MA crossing above a longer-period MA is considered a bullish signal, while the reverse crossover signals bearish momentum. They form the foundation of many trading systems.