Indicators
Moving Average
An indicator that smooths price by averaging over a set period.
Full Definition
A moving average (MA) calculates the average price over a specified number of periods, creating a smoothed line that helps identify trends. Simple Moving Average (SMA) gives equal weight to all periods, while Exponential Moving Average (EMA) gives more weight to recent prices. Common periods include 20, 50, 100, and 200.
Example
The 200-day moving average is widely watched. When price crosses above the 200 MA, it's often considered bullish. When the 50 MA crosses above the 200 MA, it's called a 'golden cross' - a bullish signal.
Related Terms
Apply Your Knowledge
Put this concept into practice with our free trading tools.