It is clear why so many traders use the 50 period moving average, just one look at this chart shows how useful the indicator is. Used by traders as a dynamic level of support or resistance, the 50 moving average takes the last 50 candles / bars, and shows the average closing price of those 50 periods. You can see how the EURJPY
has respected it as both a support and resistance
, and often when price breaks through it in one direction it will retrace to retest the moving average.
We recommend you learn more about both the simple moving average
and the exponential moving average
(weighted to favour recent data).