The moving average is one of the most common and fundamental technical indicators in the financial markets. Due to its simplicity and high accuracy, it has become a powerful tool for many investors to judge the direction and strength of trends. When the moving average rises, it often indicates that the market is in an upward channel, and the trend can be preliminarily identified as upward; conversely, when it tilts downward, it suggests that the market is declining, indicating a bearish trend.
However, the rise or fall of the moving average is usually a gradual process. If investors rely too heavily on it, they may unknowingly fall into the 'boiling frog' dilemma. After all, no technical indicator is perfect, and achieving profitability in trading is the core objective.
It is worth noting that, like other technical indicators, the moving average has a lagging nature and cannot precisely predict future trends. Price fluctuations are not dominated by the golden cross or death cross of technical indicators, but rather driven by changes in trading volume. As the saying goes, 'volume precedes price'—there must be a change in volume before it triggers price fluctuations, which in turn leads to the occurrence of golden crosses or death crosses in technical indicators.