Moving Averages

A moving average (MA) plots the average price over a rolling window — say the last 50 or 200 days — and updates each day. It filters out the jitter so you can see the direction of the trend. A rising MA means the average buyer is in profit; a falling MA means the opposite.

• SMA (Simple): every day in the window weighted equally.
• EMA (Exponential): recent days weighted more, so it reacts faster.

Traders use MAs three main ways: as a trend filter (only buy when price is above a rising MA), as dynamic support/resistance (price often bounces off the 50-day in an uptrend), and as crossover signals. When a shorter MA crosses above a longer one — the classic '50-day above 200-day' golden cross — it's read as a trend turning up; the reverse ('death cross') as turning down.

The trade-off is lag: because an MA averages the past, it confirms trends rather than predicting them. Shorter windows react faster but whipsaw more; longer windows are steadier but slower.

Moving averages are the simplest, most widely watched way to answer 'which way is this trending?' — the first question in almost every stock signal. Because so many participants watch the 50- and 200-day, those levels carry real behavioral weight.

Entry Point Trading uses trend context like this as one input in its daily signal — blended with relative strength, momentum, and macro, then graded in the open.