Looking for an easy understanding of MA (Moving Average) and ways to use it? MEXC Academy is here to help.
Moving Average indicator helps to look for characteristics of trends. MA’s purpose is to average the currency price of a certain period of time so that the trend line made based on this average value is usually relatively stable and does not have sharp fluctuations like the daily Kline.
How does the MA help us?
It is a tracking tool in order to identify whether the trend has ended or reversed and whether a new trend is taking it’s shape.
Let’s take the BTC/USDT trading pair at MEXC as an example. By default choice, our graph includes a 5-day, 10-day, 30-day, and 60-day moving average. In these options, you can choose the average for the period you want.
Moving Average as combined indicator
The MA can also be viewed as a combined indicator. For example, when the 5, 10, 30, and 60 daily moving averages appear in order from top to bottom. We often call it bullish permutation, suggesting that there is a higher possibility of a rising market.
On the contrary, these moving averages appear in order from bottom to top, and then become short-selling. The bearish pattern is more likely to fall.
This indicator is more effective in mainstream currencies, but less effective in non-mainstream currencies. This is the predictive effect of the indicator. The intersection of different moving averages sometimes represents a change in the situation and requires extra attention.
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