Using MA on BTC's example!

5 Mar 2021

Hi! Moving averages are one of the most popular technical indicators. They have various types, but they have one purpose - to determine the current trend by smoothing out volatility and noise. Let's look how MA works on price movement of BTC!



The crossing of the slow MA by the fast one from bottom upwards gives a signal to buy, from top to bottom - to sell


- The simplest form of a moving average is known as a simple moving average (SMA). It is found by calculating the arithmetic average prices for a certain period of time;

- Exponential Moving Average (EMA) assigns more weight to the latest data, which is why it is more preferable;

- The main functions of moving averages include identifying trends and pivots, as well as support and resistance levels;

- Moving average can be a risk management tool. Thanks to it, you can set a stop loss and cut a losing position;

- The most popular moving average signals are their intersection with the price or their intersection with each other;

- Crossing of the moving average price upwards gives a signal to buy, downwards - to sell;

- Moving average signals can be false when pairs are trading in flat or when a gap forms;

- Moving averages should be combined with various indicators and oscillators. So their signals will be more accurate, which will lead to the opening of profitable positions.


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