GLOSSARY · INDICATORS
What is moving average?
A moving average is the mean price over a fixed number of recent periods, recalculated each bar, used to smooth price into a single directional line.
Also called: MA
What it means
Every moving average is a lagging measure by construction — it is an average of what has already happened, so it cannot lead price. The trade-off is fixed: a shorter period tracks price closely and produces many false turns, a longer one is smoother and slower.
Why it matters
The two common variants differ in weighting. A simple moving average weights every period equally, while an exponential one weights recent periods more heavily and therefore turns sooner. Neither is superior; they lag differently.
What this changes in practice
Moving-average crossovers are the most heavily tested idea in retail trading and the results in our own set are unambiguous. EMA-PULLBACK lost $391 across seven months of 2026 and was negative in five of them, EMA-TREND lost $61 at a 33% win rate, and EMA-BOUNCE lost $40 at 20%. All three are cut, and the pattern is consistent enough to be a warning about the whole family.
Related terms
- Exponential moving averageAn exponential moving average weights recent prices more heavily than older ones, so it responds…
- TrendA trend is a sustained directional bias in price, conventionally identified by a sequence of hig…
- Average directional indexADX measures the strength of a trend on a 0–100 scale without indicating its direction, commonly…
Educational information only, not financial advice. Trading leveraged products carries substantial risk of loss. Last updated 2026-08-11.