Trend & moving averages
Moving averages, trend filters and the tools that tell you which way the market is leaning.
Key terms
- Death crossTrend & moving averagesA death cross is when a shorter moving average crosses below a longer one, most often the 50 below the 200, flagging that momentum has turned down.
- Exponential moving averageTrend & moving averagesThe exponential moving average (EMA) is a moving average that reacts faster to price changes than a simple moving average, used on MT5 charts to read trend direction and time pullback entries.
- Higher timeframe biasTrend & moving averagesHigher timeframe bias is the trend direction read from a longer chart, used to filter which trades a trader will take on a shorter entry chart.
- Hull moving averageTrend & moving averagesThe Hull moving average is a fast-turning moving average that layers weighted averages to cut lag, used on MT5 as a single trend line to read direction and trade pullbacks.
- Moving averageTrend & moving averagesA moving average is a line plotted from the average price over a set number of past candles, used to smooth price action and show the direction of the trend.
- Parabolic SARTrend & moving averagesParabolic SAR is a trend-following indicator that plots dots above or below price; when the dots flip sides, it signals a possible change in trend direction.
- Sideways marketTrend & moving averagesA sideways market is a price phase where price repeats between a fairly flat top and bottom instead of trending, so traders fade the edges or wait for a breakout.
- Simple moving averageTrend & moving averagesA simple moving average (SMA) is the average closing price of the last N candles on an MT5 chart, plotted as one line to show trend direction and pullback levels.
- SupertrendTrend & moving averagesSupertrend is a single ATR-based line plotted on price that flips above or below it to show trend direction and acts as a trailing stop.
- Trend channelTrend & moving averagesA trend channel is a pair of parallel trendlines drawn along a market's swing highs and swing lows, marking the rough zone where price has been moving.
- Trend filterTrend & moving averagesA trend filter is a rule that only allows trade signals matching the direction of a chosen moving average, trend line or trend channel.
- Trend lineTrend & moving averagesA trend line is a straight line drawn across two or more swing highs or swing lows to show the general direction of price and mark areas where price has reacted before.
- Weighted moving averageTrend & moving averagesA weighted moving average (WMA) is a moving average that multiplies recent closes by a higher weight than older ones, so it turns faster than a simple moving average.