Trader's Must-Read: How to Use the Moving Average to Improve Analytical Skills

In the toolkit of technical analysis, скользящее среднее (Moving Average) holds a pivotal position. This type of indicator smooths out price fluctuations, helping traders clearly observe the asset’s trend rather than being confused by daily market noise. Mastering this tool means you can more accurately capture market opportunities and increase the probability of profitable trades.

Understanding the Core Logic of Moving Averages

The essence of скользящее среднее is simple: it is the arithmetic average of prices over a certain period. Specifically, when you set a period N, the indicator automatically calculates the total closing prices within that period and then divides by N to get the result. This curve is plotted on the chart, allowing traders to see the smoothed price trend.

For example, a 10-day moving average is the average of the closing prices over the past 10 days; a 50-day moving average considers the most recent 50 days of data. As the period increases, the smoothing effect becomes more pronounced, but the response speed also slows down.

SMA and EMA: Two Common Forms

Simple Moving Average (SMA) is the most basic form—it treats all historical prices equally. However, many traders believe that the most recent price data should carry more weight than older data, leading to the development of Exponential Moving Average (EMA).

EMA’s calculation method gives greater weight to recent prices, making it more responsive to price changes. This is why many professional traders prefer EMA over SMA—it can track market turning points more quickly. Although the specific calculation formulas are generally not necessary for most traders (as trading platforms handle them automatically), understanding this difference can help you choose the indicator that best fits your strategy.

Customization: Find Your Own Parameters

скользящее среднее is a fully customizable indicator. You can freely select the time period based on your trading style. Shorter periods’ moving averages are more sensitive to price movements, while longer periods are more stable.

There is no absolute “correct” setting— the best approach is to experiment with different periods until you find a configuration that matches your trading plan. Some prefer short-term 20-day lines, while others rely on long-term 200-day or 365-day lines. It all depends on your trading timeframe and risk appetite.

Identifying Trends: The Primary Function of Moving Averages

Using скользящее среднее for trend identification is the most classic application. It’s important to note that these indicators are lagging—they confirm trends that have already formed, rather than predicting trend reversals in advance.

In an uptrend, you will see the price above the rising moving average; in a downtrend, the price is below the falling moving average. For long-term trend assessment, traders often use MA200d (200-day line) or MA365d (365-day line). These periods help filter out short-term market noise and reveal the true market direction.

Support Levels: Identification and Application

Another important use of скользящее среднее is to identify potential support zones. When the price declines, the position of the moving average often provides a buffer— the price may stop falling or even bounce at this level. Especially for longer periods, key moving averages (such as the 50-day or 200-day lines) frequently serve this role, although other technical indicators are usually needed to confirm the validity of this support.

This observation is also practically useful for setting stop-loss orders—you can place your stop-loss just below important moving averages to protect against a price break below support.