Moving Average
The average closing price over N periods, updated each bar — smooths noise and exposes the underlying trend direction.
A moving average (MA) calculates the mean price over a rolling window of N bars, plotting a smooth line that lags price. The two main types are the Simple Moving Average (SMA, equal-weight) and the Exponential Moving Average (EMA, more weight on recent bars).
Common uses:
- Trend filter: price above the MA = bullish bias; below = bearish.
- Dynamic support/resistance: price often pulls back to major MAs (20, 50, 200) and bounces.
- Crossovers: fast MA crossing above slow MA signals momentum shift (Golden Cross / Death Cross on long timeframes).
Example
NVDA is trending above its 21-day EMA for weeks. Each pullback to the 21 EMA holds, giving momentum traders a repeatable entry with a tight stop just below the MA.
Related Terms
Death Cross
The 50-day moving average crossing below the 200-day moving average — a widely-watched long-term bearish signal.
IntermediateGolden Cross
The 50-day moving average crossing above the 200-day moving average — a widely-watched long-term bullish signal.
IntermediateHeikin Ashi
A modified candlestick chart that uses averaged OHLC values to filter noise and make trends easier to see — at the cost of losing real-time price accuracy.
IntermediateMean Reversion
The tendency of price to return toward its historical average after an extreme deviation — the foundation of counter-trend trading.
IntermediateMomentum
The rate of change of price — how fast and with what force price is moving in a given direction.
BeginnerPullback
A temporary counter-trend retracement within an ongoing trend, offering a lower-risk entry in the direction of the trend.
BeginnerTrend
The persistent directional bias of price over a defined timeframe — up, down, or sideways.
BeginnerTrend Following
A strategy that enters in the direction of the established trend and rides it until structural evidence of a reversal appears.
IntermediateVWAP
The average price weighted by volume traded throughout the session — the institutional benchmark for execution quality.
Intermediate