#Learning of the day

Confirmation Trading using Moving Average.

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What’s Moving Average?

A Moving Average (MA) is a widely used technical indicator that helps smooth out price data to identify trends over time. It calculates the average price of an asset over a specific number of past periods.

Types of Moving Averages:

Simple Moving Average (SMA)

Adds up the closing prices over a set number of periods and divides by that number.

Example: A 10-day SMA averages the last 10 closing prices.

Exponential Moving Average (EMA)

Gives more weight to recent prices, making it more responsive to current price action.

Common EMAs: 9, 20, 50, 200

Why Traders Use Moving Averages:

Trend Identification:

If price is above the MA, it’s often considered an uptrend; below = downtrend.

Support/Resistance:

MAs often act as dynamic support or resistance levels.

Entry/Exit Signals:

Crossovers (like 20 EMA crossing above 50 EMA) can signal potential entries or exits.

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