A line that smooths price by averaging it over a chosen number of periods, making the trend easier to read.
A simple moving average (SMA) averages the last N closes; an exponential moving average (EMA) weights recent prices more heavily so it reacts faster. Common lengths are 20, 50, 100 and 200 periods.
The slope shows trend direction, and price relative to the average shows bias — above a rising average is bullish, below a falling one is bearish. Crossovers (e.g. 50 crossing 200) are used as slower trend signals.
Add the average to your chart and watch how price interacts with it — many traders use it as a dynamic support/resistance level in a trend.
Moving averages lag because they are built from past prices, so they whipsaw in ranges and give late signals. They describe trend, they do not predict turns.
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