What a moving average shows you

The average price over the last N candles, drawn as a line. MA 20 means the average of the last 20.

What it is good for

• Direction — the slope tells you what the last N candles did as a group
• A dynamic level — in a healthy trend price keeps coming back to it and bouncing

Compared to a horizontal line, it moves with the market. That is the whole difference.

Crosses are late by design

A short average crossing above a long one ("golden cross") is a summary of what already happened. It cannot be early — it is an average. Entering exactly at the cross usually means entering after the move.

When it stops working

In a range, price crosses the average constantly and every cross is a false signal. Averages are trend tools. In a box, use the box.

The usual mistake

Adding more of them. Three averages do not confirm each other — they are the same information at three lengths.

This is for learning and is not investment advice.