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Moving average is used for short term which is 21 days ie for 1 month and works exceptionally well in the trending zone and not well in non-tending zone.
Using moving average we can reduce the top and bottoms and it gives a smoothing effect and it is easy to see the wave if the prices are moving up and down. If the current price moves above the average it is Bullish and if it moves bellow it is bearish.
Moving average works like a magnet ie the concept of equilibrium.
In a average calculation where the latest data is included, and the oldest is excluded is called a Moving Average.
It is the trend line taken from the average price for the period selected.
Generally when the price goes above the MA the trend is considered bullish and when it trends below the MA it is considered bearish.
Moving Average(MA) is a technical indicator that smooths the price curve. It is represented by one curve.
Above the MA curve, trend is bullish. Below the MA curve, trend is bearish. If MA is in the middle position then it is sideways trend.
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