Smoothing price noise
A moving average (MA) plots the average closing price over the last N bars. It helps visualise trend direction.
- SMA — simple average of last N closes.
- EMA — exponential MA; weights recent prices more heavily.
Common settings: 20 EMA (short-term), 50 SMA (medium), 200 SMA (long-term benchmark on daily charts).
Moving averages lag price — they describe what happened, not what will happen. Use them as context, not as standalone buy/sell signals.