Moving average
A line showing the average closing price over a set number of recent candles.
A moving average is a line on the chart showing the average closing price over a set number of recent candles, such as the last 20 or the last 50. Each new candle adds a price and drops the oldest one, so the line moves along with the chart.
Moving averages smooth out the noise so the trend is easier to see. Price staying above a rising average suggests an uptrend; staying below a falling one suggests a downtrend. Shorter averages react quickly; longer ones move slowly.
A type called the exponential moving average, or EMA, gives recent prices more weight. Like every indicator, a moving average lags behind price and describes the past, not the future.
Example: a 20-day moving average adds up the last 20 daily closing prices and divides by 20. If those closes total $2,000, the average is $100.
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Educational definition. Not financial advice; no real-money execution.