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Indicators · 4 min
Moving averages: SMA and EMA
A moving average is the average price of the last few periods. It smooths out noise so the trend is easier to see.
SMA and EMA
SMA is a plain average. EMA gives recent prices more weight, so it turns faster. EMA 20 follows short moves, EMA 50/200 the big trend.
Price above or below the line
Price above a long average (like EMA 200) usually means an uptrend; below it, a weak trend.
Crossover
When a short EMA crosses above a longer one (say 9 over 21), many treat it as a buy signal. In sideways markets it gives false signals too.
Quiz (3 questions)
1. How is EMA different from SMA?
2. Price above EMA 200 usually suggests…
3. When do crossover signals fail most?
This is for learning only, not advice on any stock or trade.