Glossary
Moving average
The average price over a fixed number of recent periods, recalculated each period to smooth out short-term noise.
A moving average takes the last N closes, averages them and plots the result as a line that moves forward with each new period. The two main types are the simple moving average, which weights every close equally, and the exponential moving average, which weights recent closes more.
Longer averages are smoother but slower to turn; shorter ones follow price closely but change direction more often. The 20-, 50- and 200-day averages are among the most widely watched on daily charts.
Traders use moving averages to describe trend direction and to see how far price has stretched from its recent average. The line is built from past prices, so it always lags.
Related terms
For education only, not financial advice. Crypto assets and stocks are volatile, and leveraged positions can lose more than the money you put in.