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Analysis

Moving average — definition & meaning

A line that smooths price by averaging it over a set number of periods.

A moving average smooths out price by continuously averaging it over a chosen number of periods, making the underlying trend easier to see.

A simple moving average (SMA) weights all periods equally; an exponential moving average (EMA) gives more weight to recent prices, so it reacts faster. Crossovers between averages are a classic (if lagging) trend signal.

The information on Trding.io is for general information only and is not investment advice. Trading involves a real risk of losing money, and most retail traders lose. Never trade money you cannot afford to lose.

Related terms

Exponential moving average (EMA)
A moving average that weights recent prices more heavily.
Trend
The general direction a market is moving over time.
MACD
A trend-and-momentum indicator built from two moving averages.
Golden cross
When a short-term average crosses above a long-term one — a bullish signal.
Volatility
How much and how quickly a price moves over time.
Volume
The number of units traded over a period — a gauge of activity.

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