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Moving averages

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Simple moving averages (MA)

MAs are an average of the last 𐍇 candles close values.
𐍇 being a variable you can set.

Add one by searching for "MA" in the indicators list.

Adding indicators in tradingview

Set the 𐍇 with the configuration button

Configuring moving average in tradingview

Here is a 30 MA on the daily ETH/USD chart:

A 30-MA on the daily ETH/USD chart

It gives you a smoothed view of the price.
The lower the value is, the more it gets near the candles, here is a 5 MA:

A 5-MA on the daily ETH/USD chart

Exponential moving averages (EMA)

EMAs function the same way as MAs, except they give more weight to recent candles data.
They are more reactive to price changes.

Here is a 30 EMA:

A 30-EMA on the daily ETH/USD chart

You can see it's more responsive to movements than the simple 30 MA.

What is the use of moving averages?

They are used as ways to follow trends and get entry/exit signals.
Most used ones are 30MA, 50MA, and 200MA.
Feel free to play with the values and explore their possibilities.

Moving averages as support/resistance levels

Using moving averages as supports and resistances

In 2017, the daily 30 MA has been very important for most altcoin markets, acting as an almost perfect support/resistance level.

Those two big waves on the SC/BTC chart were +1000% and +500% gains.

A 200-MA on the weekly BTC/USD chart

The weekly 200 MA was watched by a lot of traders during Bitcoin's leg down. It served as a support and many used it as an entry-point.

Getting a good entry glad to the exponential moving average on Bitcoin

Here the weekly 20 EMA performed as a support for more than 2 years!

It should be noted that moving averages are not as useful during periods of consolidation, for example: the end of last chart.

MAs crossing

You can combine 2 moving averages and use them as entry/exit when they cross.

Golden and death cross with moving averages

The 50-200 MA pair is often used for this.

Fancy people will enjoy the famous EMA ribbon:

Exponential moving average ribbon

Hipsters say it shows them buy/sell indications.
In my personal opinion, its place is more in an art gallery than in a chart.


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