2025-11-10 SmartFinance FP Market - Moving Average
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Ram Caceres2025-11-10 SmartFinance FP Market - Moving Average
Uploaded by
Ram CaceresMoving Average
Guide
Moving Average (MA)
is a widely used technical indicator that
smooths out price data over a specified
period to identify trends and reduce
market noise. It helps traders see the
average price over time, making it
easier to spot trends and potential entry
or exit points.
MA Crossovers
Occurs when a lower moving average (ex. 10MA) crosses over a higher moving average (20MA) on
a price chart, indicating a shift in market momentum.
Bullish Crossover: When the 10-day MA crosses above the 20-day MA, it signals a potential buying
opportunity as the short-term price trend is gaining strength over the long-term trend.
Bearish Crossover: When the 10-day MA crosses below the 20-day MA, it suggests a potential
selling opportunity as the short-term price trend is weakening compared to the long-term trend.
How to use the
Moving Average in
Your Trading
Trend Analysis
Main Functions of Moving Averages (MAs)
Identify Trends and Reversals: Help define the direction
of the market and spot trend changes.
Find Support and Resistance: Act as dynamic support
and resistance levels.
Measure Momentum: Assess the strength and speed of
price movements.
Trend Analysis with MAs
Lagging Indicator: MAs do not predict new trends but track and confirm trends once they are
established.
Crossover Signals: The MA crossover is an effective tool for spotting potential new trends.
MA’s can also be used to determine dynamic support and resistance. It is easy
to notice that the falling asset of a price will stop and reverse its direction like
the same level as an average.
