In fact, the moving average is simply a line connecting the average closing prices of N trading days within a certain period. Many people have summarized its operational rules and believe that it operates with a certain regularity.
For example, when the price falls near the moving average, it will be supported by the moving average. "Actually, there was no road on the ground; when many people walk it, it becomes a road." The moving average itself does not have support or resistance; it only becomes a support or resistance level in the market when many people believe it has such characteristics.
The support and resistance of the moving average is largely a psychological acknowledgment by most investors. Therefore, when we trade, we find that sometimes the moving average can act as support or resistance to the price, while at other times it may not.
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Any moving average of any period can potentially act as support or resistance in the market. The momentum of price changes after being supported or resisted by smaller period moving averages is stronger. Therefore, a market rising along the 5-day moving average is stronger than one rising along the 10-day moving average, which is stronger than one rising along the 30-day moving average. The moving average is not a straight line like trend lines and high-low horizontal lines; investors often regard them as dynamic trend lines, especially the 30-day moving average, which more clearly indicates the trend direction.
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Speaking with visuals: The market is in an uptrend, with prices rising all the way. When prices rise too quickly and move far from the moving average, there is a need for a correction. When prices correct to near the 30-day moving average, they will be supported by it. As more investors believe that the moving average has a supportive effect on the market, when prices fall near the moving average, investors will enter the market to go long based on the support of the moving average. This phenomenon leads to the situation where as soon as prices correct to near the moving average, there are investors entering the market, naturally making the moving average's support effect a common understanding among investors.