Forex glossary
Moving Average (MA)
A moving average smooths a price series using specified weights. SMA uses a fixed window, EMA retains a diminishing influence from earlier history, and other variants use different constructions. Length, average type and price input affect lag and interpretation; a crossover does not establish a future trend change.
Illustrative example
How does it work in practice?
Assume closing prices of 99, 102 and 105 USD. A three-period SMA is 102 USD; an average assigning larger weights to newer observations can differ despite using the same price sequence.
A case to work through
Same number, different timeframe
Hypothetically, you compare MA(20) on H1 with MA(20) on D1.
- H1 refers to 20 hourly bars; D1 refers to 20 daily bars.
- Sessions and gaps mean bar counts need not equal continuous calendar time.
What follows? Compare settings on a consistent basis.
Example boundary: Changing MA type or replacing close with another input also changes the series.
A useful distinction
Moving Average (MA) / Exponential Moving Average (EMA)
Moving average is a family of constructions; EMA is one version with decaying historical weights.
Check your understanding
Translate indicator length into the chosen chart's observation units.
Show the answer and explanation
12 five-minute bars
Indicator length counts chart observations.
Direction and strength tools
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Related terms
Sources and documentation
- MetaTrader 5 – moving averages
SMA window averaging and EMA updates from the prior value plus a new observation.
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