Moving Average
Technical Analysis
What it means
A line showing the average price over a set number of periods, which smooths out noise and makes the trend easier to see.
Example
A 50-day moving average adds the last 50 daily closes and divides by 50. As new days come in, the oldest drop out, so the line "moves" with the trend.
Mistake beginners make
Beginners pile on five moving averages and freeze. One or two are enough; ten lines crossing each other create confusion, not clarity.