Moving Averages (MA) are among the most commonly used tools for determining trends.
SMA: The Simple Moving Average sums up closing prices over a certain period and divides it by their number.
EMA: The Exponential Moving Average gives more weight to recent prices, thus reacting faster to market movements.
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📊 Practical Example:
On the BTC/USDT chart (4 hours): a price breakout above the 50 moving average may indicate the beginning of an uptrend.
On the ETH/USDT chart (daily): A price drop below the 200 average is often considered a signal to remain in a downtrend.
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💡 General Trading Tip:
Do not rely solely on moving averages, but combine them with other tools such as support and resistance levels or momentum indicators.
📍 🔑 Key Takeaways:
Averages reveal the overall trend and reduce noise.
SMA is slower and more stable, EMA is faster and more sensitive.
Combining two averages (short and long) helps identify entry and exit points.
✅ Practical Checklist:
Choose an appropriate time frame (4 hours for short-term trading, daily for longer-term).
Identify appropriate averages (e.g.: 50 and 200).
Watch for crossovers of the averages (Golden Cross and Death Cross).
Look for alignment with support and resistance levels.
Do not enter without additional confirmation.
