A moving average (MA) takes the average of past prices and plots it as a line. It smooths out the noise so you can see the trend direction. The two most common types are the SMA (equal weighting) and EMA (recent prices weighted more).
SMA vs. EMA
The SMA treats every day equally — a price from 20 days ago matters as much as today. The EMA gives more weight to recent prices, so it hugs the price more closely and reacts faster. Most short-term traders prefer the EMA; long-term analysts often use the SMA.
Key Periods
| Period | What it shows | Used by |
|---|---|---|
| 9 / 12 EMA | Short-term momentum | Scalpers, day traders |
| 20 / 21 EMA | Short-term trend | Day traders |
| 50 EMA | Medium-term trend | Swing traders |
| 200 EMA/SMA | Long-term trend — institutional | Everyone — the line in the sand |
The 200 MA: The Most Important Line
The 200-period moving average is watched by almost every trader and analyst. When price is above the 200 MA, the long-term trend is up; below it, down. Institutions place orders around it. In an uptrend, the 200 MA often acts as support during pullbacks.
Golden Cross & Death Cross
A golden cross occurs when the 50 MA crosses above the 200 MA — a bullish long-term signal. A death cross is the opposite — 50 below 200 — bearish. These are lagging signals, but they confirm that a trend change has occurred.
Moving averages will never get you in at the bottom or out at the top — they confirm trends after they've begun. That's a feature, not a bug: they keep you on the right side of the trend rather than guessing at reversals.
How to Use Moving Averages
- ▸Trend filter: only take longs when price is above the 50 EMA; only shorts when below.
- ▸Dynamic support/resistance: in trends, pullbacks to the 20 or 50 EMA are entry opportunities.
- ▸EMA stack: when 9 > 20 > 50 EMA are all aligned and rising, the trend is strong.
- ▸CURIO overlays EMA 20/50/200 directly on the chart — toggle them in the indicators panel.