Trend indicators - moving averages

The moving average (MA) calculates the average price of a token over a period of time.

Let’s say we have three candles: C1’s closing price is 2, C2’s is 4, and C3’s is 6.

The MA3 (MA calculated over the last three candles) is calculated as (C1+C2+C3)/3 = 12/3 = 4.

Now C4 is being formed. The timeframe is four hours and we’re only 30 minutes in, so for now, C4’s price is 8.

MA3 is now (C2+C3+C4)/3 = (4+6+8)/3 = 6.

On a chart, we’d draw a line from C3’s MA3 4 value (where our MA3 starts) to C4’s MA3 6 value, forming a line. That line would continue as each new candle is formed. Note that we can’t calculate MA3 for the first two candles because we need three candles to get that information (MA3). Here’s what it looks like:

Figure 4.1 – Moving average (MA3)

Every YouTuber and his cousin are talking about specific moving averages...