// Definition
A moving average is a line showing the average price over a set number of recent candles, used to smooth out noise and show the trend.
Explained simply
A simple moving average (SMA) weights every candle equally. An exponential moving average (EMA) gives more weight to recent candles, so it reacts faster. Common lengths are 20, 50 and 200.
Price staying above a rising moving average is a sign of an uptrend; below a falling one, a downtrend. Moving averages can also act as dynamic support or resistance.
Tip
Moving averages lag price. They confirm trends well but give late and messy signals in sideways markets.
For education only, not financial advice. Trading is risky and you can lose money.