What It Is
A Moving Average (MA) is a calculation that smooths price data by averaging the closing prices over a specified number of periods. The result is a flowing line that filters out noise and reveals the underlying trend direction.
Moving averages are lagging indicators - they tell you what has happened, not what will happen. This isn't a weakness; it's their purpose. They're designed to confirm trend direction, not predict reversals.
Three core uses: (1) Trend direction - price above MA is bullish, below is bearish. (2) Dynamic support/resistance - MAs often act as bounce points. (3) Crossover signals - when faster MAs cross slower MAs.
The 200 MA on the daily chart is the single most-watched level in any market. Price above it = bull territory, below = bear territory. When in doubt about the trend, check the 200 MA first.
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Compare this reference with related structures and readings before applying it to a live chart.