📉 Moving Averages (SMA vs EMA)

📉 Moving Averages (SMA vs EMA)

Moving Averages help smooth out price action and reveal the overall direction (trend) of the market.

They’re like “trend lines on autopilot.”

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🧠 Simple Definition

A moving average (MA) shows the average price of a coin/token over a set period of time.

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🧮 Types of Moving Averages

🔹 1. SMA (Simple Moving Average)

• Takes the average of the closing prices

• All days are treated equally

Example: A 10-day SMA = sum of the last 10 closes ÷ 10

🔸 2. EMA (Exponential Moving Average)

• Similar to SMA, but gives more weight to recent prices

• Reacts faster to price changes

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📊 Comparison Table

Feature	SMA	EMA
Calculation	Equal weight to all candles	More weight on recent candles
Reaction Time	Slower	Faster
Use Case	Smoother trends	Quick signals

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📈 Popular Moving Averages

• SMA 50 & 200 → Long-term trend indicators

• EMA 20 & 50 → Often used in crypto and Mandalyze AI

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🔍 What to Look For

• Price above MA → Bullish signal (uptrend)

• Price below MA → Bearish signal (downtrend)

• Crossovers → When a short MA crosses a long MA

  • Bullish Crossover (Golden Cross): EMA 50 crosses above EMA 200

  • Bearish Crossover (Death Cross): EMA 50 crosses below EMA 200

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🤖 How Mandalyze AI Uses MAs

Mandalyze AI detects:

• Key crossovers (Golden/Death Cross)

• Price + EMA/MA alignment

• Momentum shifts based on MA slope

You get easy-to-read feedback like:

“ETH is trading above EMA-20 and EMA-50 – uptrend momentum confirmed.”

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🧪 In Summary

Moving averages give you a big-picture view. They filter out noise and help you trade with the trend.

📌 Pro tip: Trade with the trend, not against it.

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🧭 Next Lesson: RSI – Relative Strength Index