Definition – What does Moving Average (MA) mean?
A moving average (MA) is a technical charting tool that helps traders view the general trend of price action. Essentially, a moving average looks at the value of a currency pair over a specific time frame and plots and re-plots that line as more data points are added. This visual line can help a trader see the trend and differentiate it from insignificant market noise.
ForexTerms explains Moving Average (MA)
There are many flavors of moving averages that have been tailored to help a trader understand a currency pair’s current price action within the context of past data. For example, a simple moving average (SMA) considers all data points equal, whereas an exponential moving average gives more statistical weight to the most recent data. Moving averages are an important part of every technical trader’s toolbox.