Description:
This article explains how moving averages help identify market trends and spot trade opportunities. Ideal for traders who want a simple yet effective way to analyze price action.
Content:
A moving average (MA) is a line that smooths out price data over a selected period, helping you spot the direction of the trend.
Simple Moving Average (SMA): An average of prices over a set period.
Exponential Moving Average (EMA): More sensitive to recent price movements.
Trend direction: If price is above the MA, it’s an uptrend. If below, it’s a downtrend.
Crossovers: When a shorter MA crosses a longer MA (e.g., 9 EMA crosses 21 EMA), it can signal a potential buy or sell.
Dynamic Support/Resistance: Price often reacts around MAs.
Use a 200 EMA to identify the long-term trend and a 50 EMA for short-term confirmation.
