What Are Moving Averages

Moving averages are a commonly used technical indicator in trading that help traders identify trends and potential entry and exit points for trades. A moving average is calculated by averaging the price of an asset over a certain period of time, typically using the closing price. The resulting line is then plotted on a chart, and as the price of the asset changes, the moving average line also changes. The most commonly used periods for moving averages are 50, 100, and 200, although traders can use any period that suits their trading strategy. Moving averages are often used in conjunction with other technical indicators to provide traders with a more complete view of market trends and potential trading opportunities.