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Investment
Moving Average
The average price of a stock over a specific number of days, used to smooth out price charts and spot trends.
Simple moving averages treat every day equally. Exponential moving averages give more weight to recent prices. Traders use them as dynamic support and resistance levels and to generate buy/sell signals.
It's like averaging your test scores over the last 50 days so you can see the real trend instead of one bad day.
Real world: The 50-day and 200-day moving averages are the most watched. When the 50-day line crosses above the 200-day line (golden cross), traders see it as a strong buy signal.
💡 Moving averages turn noisy price charts into clear trends.