Glossary
Courses & Webinars
Economic events
Modules
  1. Home
  2. Glossary
  3. Moving Average

Moving Average

The moving average is a technical indicator that displays the average price of a financial instrument over a specific period of time. It is plotted as a curving line on the price chart. A Buy signal is generated when the price moves above the moving average line, whereas a Sell signal is in place when the price moves below the moving average line. It is a trend following indicator and as such it produces false signals and poor results during a range. It is also a lagging indicator and therefore cannot predict the future but rather follows the price action. There are many different methods of calculating a moving average but the main difference stems from the weight assigned to the current prices.