Cryptocurrency Trading Technical Analysis: Part 1

The Ultimate Moving Average Trading Guide

Use SMA, EMA and WMA Like a Pro

Moving averages are some of the most important tools in technical analysis. Whether you’re a beginner or an experienced trader, mastering moving averages can help you identify trends, support and resistance levels, time your entries and exits, and improve your overall trading strategy.

In this guide, we’ll break down the three most commonly used moving averages: Simple Moving Average (SMA), Exponential Moving Average (EMA), and Weighted Moving Average (WMA). You’ll learn how each one works, their key differences, and when to use them effectively. By the end of this article, you’ll have the knowledge and confidence to apply these indicators like a pro.

Let’s dive in!

What is a moving average?

A moving average is a simple technical indicator that calculates the close price of an asset over a certain period. A ‘period’ means a candle in any time frame.

For example, a 10-period moving average calculates the average close price of the last 10 candles, summing up the previous 10 periods, divided by 10. This can be hourly, daily, weekly, etc.