TRADING KNOWLEDGE – MOVING AVERAGE (MA)

The Moving Average (MA) is a popular technical indicator that helps smooth out price data to better identify market trends. MA doesn't predict the future but helps traders clearly see the current direction of the market.

🔍 2 Main Types of MA:

🔔 SMA (Simple Moving Average): The average of closing prices over a set period (e.g., SMA 20 = average of the last 20 candles).

🔔 EMA (Exponential Moving Average): Similar to SMA but gives more weight to recent prices, making it more responsive to market changes.

📈 What is MA used for?

📍Trend Identification:

💡Upward sloping MA → Uptrend
💡Downward sloping MA → Downtrend

📍Trading Signals:

💡Price crossing above MA → Buy signal
💡Price crossing below MA → Sell signal

📍Combining Two MAs (Short & Long Term):

💡Short MA crosses above long MA → Buy signal (Golden Cross)
💡Short MA crosses below long MA → Sell signal (Death Cross)