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Module B · Technical Analysis·Lesson 4

Moving Averages

Use MAs as dynamic support/resistance and trend filters

4 sections · 3 quiz questions · ~5 min read

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Simple Moving Average (SMA)

The SMA calculates the average closing price over N periods. The 20 SMA shows the average of the last 20 candles. It smooths out noise and shows the underlying trend direction. Price above the SMA = bullish bias.
SMA 20SMA 50Moving Average Crossover

Exponential Moving Average (EMA)

The EMA gives more weight to recent prices, making it faster to react. The 20 EMA is popular for short-term trends. The 50 and 200 EMAs are watched by institutional traders for major trend direction.
Wick compares two cards, SMA as a plain average of the last 20 closes and EMA as an average that weights recent prices more, teaching why the EMA moves faster.SMAPlain average ofthe last 20closesEMAMore weight onrecent prices,so faster
Wick saysAn SMA averages closes evenly; an EMA leans on recent prices, so it reacts faster.

Golden & Death Cross

When the 50 MA crosses above the 200 MA, it's a Golden Cross (bullish). When the 50 crosses below the 200, it's a Death Cross (bearish). These are significant signals watched by the entire market.
Wick points at a practice chart where a fast 50 line crosses above a slow 200 line, labeled Golden Cross, teaching what this widely watched signal looks like.Watch the crossPractice chart50 MA200 MAGolden Cross
Wick saysWhen the 50 MA crosses above the 200 MA, traders call it a Golden Cross. It is a clue, not a promise.

Dynamic Support & Resistance

Moving averages act as dynamic S/R levels that move with price. In a strong uptrend, the 20 EMA often acts as support — price bounces off it repeatedly. Use MA bounces as entry opportunities in trending markets.
Wick points at a practice chart where price dips to a rising average line and then keeps climbing, showing how a moving average can act like a moving floor.Moving floorPractice chartBounce off EMATrend goes on
Wick saysIn a strong uptrend, price often pulls back to the 20 EMA and bounces off it.
Quick check

Did it stick?

Try to answer each one before you peek at the explanation.

1

What is a "Golden Cross"?

2

An EMA reacts slower to price changes than an SMA of the same period.

3

In a strong uptrend, which MA commonly acts as dynamic support?