2025-07-21 09:59:17
To help you understand what moving averages are - in plain English - and how you can start using them to read trends and make smarter trading decisions (without getting confused by math or formulas).
Imagine price is like a heartbeat. It goes up and down all the time.
A moving average (MA) helps calm the noise.
It shows you the “average” price over the last few candles - like a smoother line that helps you see the overall direction the market is going.
If the line is going up, price is likely trending up.
If it’s going down, price is likely trending down.
If it’s flat, the market might be ranging (sideways).
As a beginner, you don’t need to predict the future.
You just need to follow where the price is already going.
That’s where moving averages help.
Think of the market like a road trip:
When the MA is pointing north, you follow it. When it starts to curve south, you slow down or turn around.
Let’s say you see a 20 EMA or a 50 SMA - what does that mean?
The number just means:
“We’re averaging the price of the last 20 or 50 candles.”
Smaller numbers (like 9 or 20) = faster, more reactive
Bigger numbers (like 50 or 100) = slower, more stable
Beginner Tip:
Use EMA for faster trades, SMA for slower trades.
Most traders use both.
Here’s a super simple way to start using MAs in your chart:
“Price touched the moving average… time to buy!”
Nope. That’s how beginners get trapped.
Think of MAs like a weather report.
They don’t make decisions for you - they give context.
Pro-Tip: Price action must confirm first through a breakout. Moving averages will guide the way.
Type | Period | Use For |
---|---|---|
9 EMA | Fast trends | Scalping or quick moves |
20 EMA | Medium trend | Day trading direction |
50 SMA | Big picture | Swing trading / filter |
100 SMA | Macro trend | Major support/resistance |
Tip: Start with 20 EMA and 50 EMA — simple, effective, and enough.
Moving averages are like your first training wheels in trading.
They won’t give you perfect signals.
They won’t predict the market.
But they will help you see the trend, follow momentum, and avoid emotional decisions.
Start simple. Watch how price respects the 20 EMA or bounces off the 50 SMA.
You don’t need to trade every move - just trade in the direction that makes sense.
Over time, you’ll learn how to combine MAs with price action, structure, and confidence.
That’s when everything starts to click.
You don’t need to trade yet.
Just build the eye. Train your pattern recognition. Trust the process.
Open a free demo account today and experience institutional-grade spreads, lightning-fast execution, and all the tools you need to grow as a trader.
It’s time to go from theory to execution - risk-free.
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