Moving Averages

Smoothing out the noise

A moving average (MA) smooths raw price data into a single flowing line by averaging price over a chosen number of recent periods, continuously updating as new data comes in. This makes the underlying trend direction easier to see through the day-to-day noise of individual candles.

SMA vs. EMA, and crossovers

A Simple Moving Average (SMA) weights every period in its lookback equally. An Exponential Moving Average (EMA) weights recent periods more heavily, making it react faster to new price action. A common signal is a "crossover": when a faster (shorter-period) MA crosses above a slower (longer-period) MA, it's called a "Golden Cross" (bullish); crossing below is a "Death Cross" (bearish).

• •SMA: equal weight to every period in the lookback — smoother, slower to react.
• •EMA: more weight on recent periods — faster to react, but can give more false signals in choppy markets.
• •Golden Cross: shorter MA crosses above longer MA — often read as bullish.
• •Death Cross: shorter MA crosses below longer MA — often read as bearish.