Indicators and tools
What is a moving average?
A moving average is a line that shows the average price over the last few candles. It smooths out the wiggles so the trend is easier to see.
A 20-period moving average on a daily chart is the average close of the last 20 days. Each new day, the oldest day drops off and the newest is added.
A simple moving average (SMA) treats every candle the same. An exponential moving average (EMA) gives more weight to recent candles, so it reacts faster.
Every moving average is late, because it is built from past prices. Use it to see direction, not to predict the next candle.
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This is taught in Grade 6: Indicator Lab.
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Reviewed 2026-10-04. Education only, not financial advice. Trading involves risk of loss.