Moving Average

A Moving Average (MA) is a widely used technical indicator that helps to smooth out price action by filtering out the "noise" from random short-term price fluctuations. It is a trend-following, or lagging, indicator because it is based on past prices.

There are two main types of moving averages:

• Simple Moving Average (SMA): The simplest form of a moving average. It is calculated by adding up the closing prices for a certain number of periods and then dividing the total by that number of periods.
• Exponential Moving Average (EMA): This type of moving average gives more weight to recent prices, making it more responsive to new information.

Moving averages are used to identify trend direction and to determine support and resistance levels.