We will use two moving averages: 50 and 200 days.
1. Convergence, divergence, crosses. The position of the averages shows you the market sentiment. If the short-term average (50) crosses above the long-term average (200) - this predicts a price increase. Conversely, if it crosses below, it indicates a decrease.
This moment should not be taken too literally. Moving averages are a lagging indicator; if we see a crossing on the chart - the drop or increase has already occurred. Therefore, it is better to look ahead - if the averages are diverging - the trend is stable; if they start to converge - there may be a reversal.
2. Averages often act as dynamic support or resistance. If there is such a line on the price's path, the price may at least pause at it. It may also reverse, bouncing off from it. Keep this in mind when setting limit orders.
Example - Bitcoin chart:
Here we see a golden cross - a sign of growth. As it should be, the indicator is lagging; the cross formed only after growth occurred. But the moving averages converged (approached each other) even before that, well indicating that this would happen.
It is also seen how the MA 50 average held the price and pushed it up. At this level, we also have a support line. So predicting the bounce was not difficult.