LESSON 12 OF 16 · 3 MIN
Moving averages and RSI
IN SHORTA moving average smooths the price to show the trend. RSI measures how strong recent moves have been, on a scale of 0 to 100.
A moving average (MA) is the average closing price over a number of periods, such as 50 or 200 days. An EMA (exponential moving average) gives more weight to recent prices, so it turns faster.
- Price above a rising 200-day average: often read as a long-term uptrend.
- A shorter average crossing above a longer one: momentum improving.
- Averages lag: they confirm moves after they start.
RSI (Relative Strength Index) runs from 0 to 100. Above 70 is often called overbought and below 30 oversold. Strong trends can stay overbought for a long time.
KEY POINTIndicators summarise price; they do not predict it. Use them to ask better questions, not as signals on their own.
Try it: Open Chart Lab and add a moving average.
Open a chartEducation only. TradingFloor AI does not give investment advice. Prices can fall as well as rise and you may get back less than you invest.