Lesson 4 of 5 · 4 min read
Moving average
Stripping out the noise to see the real trend.
What is an MA?
A moving average (MA) averages the price over X periods (e.g. 50 or 200 days). The line is smoother than the price and shows the underlying direction.
How traders use it
Price above the 200-day MA = often seen as 'long-term bullish'. A short MA crossing above a long one (golden cross) is viewed as positive; the reverse (death cross) as negative.
Watch out
MAs are 'lagging' — they react after the move. They confirm a trend, they don't predict. Use them as a tool, not as a crystal ball.
Remember this
- An MA averages the price over X periods and makes the trend visible.
- Price above the 200-day MA is often considered long-term bullish.
- Golden cross = positive, death cross = negative signal.
- MAs are 'lagging': they confirm a trend, they don't predict.
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