Moving averages 101
A moving average smooths data by taking a rolling window of closes. A short window reacts fast and helps timing while a long window reacts slowly and defines the bigger trend with important reference levels. Many traders use both and look for alignment to filter noise.
Simple and exponential variants are common. The simple version weighs all observations equally while the exponential version puts more weight on recent observations. No single variant wins in every market. Choose settings that fit your time frame and test them across different assets and periods.
Focus on slope, crossovers and the way price behaves around the average. In strong advances long averages often act as dynamic support. In persistent declines they act as dynamic resistance. These reference points allow you to define risk with clarity and avoid guessing tops and bottoms.