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Chart reading 2 min read

Use moving averages in chart research

Compare price with an average while keeping the period and available history in mind.

A moving average summarizes past prices. Its period changes the question it answers.

Step 01

Choose what you want to summarize

A simple moving average, or SMA, gives equal weight to observations in its window. An exponential moving average, or EMA, puts more weight on recent observations. Both describe past data. Neither turns a chart into a prediction of the next session.

Step 02

Set the period in the chart

Add an SMA or EMA overlay and choose its period in the indicator settings. On daily data, a 50-period average refers to 50 daily bars, not 50 calendar days. A longer window summarizes more history and will respond differently to a recent price change.

Step 03

Compare observations consistently

Look at the relationship between price and the average over time. If you compare two symbols, use the same average type and period. A crossover describes a relationship that occurred; further research is needed to understand the surrounding market and company context.

Step 04

Carry the condition into a scan

Once the comparison is clear, you can explore a supported moving-average condition in CleverScan. Check the documentation and available history. The Trend Matrix also groups documented average comparisons across multiple horizons, with source values available for inspection.

Read our data and methodology notes for coverage and calculation context. This guide explains research tools and observations. It does not recommend a trade or investment.

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